Staff Reporter :
The cost of mobile phone calls and internet services is expected to increase as the National Board of Revenue (NBR) plans to raise the supplementary duty (SD) in the upcoming national budget for fiscal year 2024-25.
This decision aligns with the loan conditions set by the International Monetary Fund (IMF), which require the revenue board to gradually reduce tax and VAT exemptions across various local industries.
Additionally, the government is under pressure to improve the existing tax-GDP ratio, which is currently the lowest among South Asian countries.
NBR officials have indicated that starting July 1, the SD on phone calls, internet usage, and cigarettes will increase, likely making these services more expensive for consumers.
The adjustments come as the IMF prepares to disburse the third installment of a $4.7 billion loan next June. An IMF delegation is currently visiting Bangladesh and is scheduled to meet with NBR officials on Sunday to review compliance with the loan conditions.
As part of the discussions, the NBR will present its strategic plan to phase out tax exemptions and reform tax administration practices to the IMF team.
To boost the tax-GDP ratio, the NBR plans to increase the SD on phone calls and internet services by 5%. The introduction of SD on phone services began in fiscal year 2015-16 amidst significant criticism, initially set at 5%, then reduced to 3%, and subsequently raised to 5% two years later. The rate was further increased to 10% in 2019 and then to 15% in 2020.
Currently, mobile phone subscribers are charged a 15% SD, a 15% VAT, and a 1% surcharge on calls and SMS fees. For data usage, the VAT stands at 7.5%.
With the new tax structure, a subscriber will effectively have about Tk 78 available from every Tk 100 refill, with the remainder going to the government exchequer.
Experts and industry insiders have criticized the move, arguing that it undermines the government’s commitment to digitalization.
TIM Nurul Kabir, an independent telecommunications expert, expressed concerns about the affordability of cellular services. “These services are becoming too costly for ordinary people. We urge the government to engage with investors to better understand the situation and its implications,” he stated.
