Expenses on using internet could increase despite the VAT reduction of 10% in the budget passed for the fiscal years 2018-19.
Associated bodies to the internet service sector say that the price hike would cause due to a complicated condition after passing the annual budget.
The existing VAT on the internet for the subscribers’ level now stands at 5%.
However, the Internet Service Providers (ISP) and mobile phone operators are not likely to reduce prices despite the government’s move.
The internet service operators’ sources say that 15% VAT on Nationwide Telecommunication Transmission Network (NTTN) operators and 5% on International Internet Gateway (IIG) have been imposed newly.
Prices may increase at least 20% to the existing package if the complicacy is not over, the sources also feared.
It is learnt that the VAT rebate facilities for NTTN and IIG were scrapped in the new budget.
The cancellation will increase the cost of purchasing and transporting of Bandwidth, a signal transmitting medium.
If the cost of product rises, we will have to sale the internet service in an increased rate, President of the Internet Service Providers Association Bangladesh (ISPAB) Aminul Hakim told Bangla Tribune.
He expected the finance ministry and the NBR to take steps in a bid to resolve the VAT related complications.
Association of Mobile Telecom Operators of Bangladesh (AMTOB) sources says that no service code was specified in the SRO issued by the NBR regarding the VAT.
For this, the mobile phone operators are still charging 15% VAT on using from the customers even after the new rate fixed in the budget.
AMTOB claimed that the new instruction is effective for the ISPs only as the service code ‘S 12.14’ was mentioned under ‘S 012’ for the internet organizations.
The allocated service code for the mobile operators is ‘S 12.10’.
Being contacted, the ICT minister Mustafa Jabbar said, “The cell phone operators don’t want to reduce the VAT on using the internet. They are now utilizing the chances of complication after issuing an SRO by the NBR.”
It is a planned situation, the minister asserted.
Answering a question, he said that he didn’t know about the situation.
“I asked the ISPAB to place written complain of the issue. With the letter I will sit with the finance minister to resolve the VAT related complexities”, Mustafa Jabbar added.
A high-level meeting is expected to be held among the NBR, ISPs and the mobile phone operator regarding the aspect, sources said.