Withdraw Tk 1,200 tax on new subscription
Mobile phone operators urge govt
Star Business Report
All private mobile phone operators yesterday urged the government to withdraw the Tk 1,200 tax imposed on any kind of new subscription in the proposed budget for the fiscal 2005-06.The National Board of Revenue issued a statutory regulatory order making effective the imposition of the government duty on SIM (subscriber identification module) card and other cell phone connections. The decision has created chaos in the industry pushing the price of mobile phone connections higher. Most operators have stopped selling connections while a section of unscrupulous businessmen have been making brisk money by exploiting the situation. The chief executives of all private cell phone operators yesterday called on the Post and Telecommunications Minister Aminul Haque at his office and placed a letter demanding his immediate intervention. In the letter, the cell phone operators said the imposition of the new tax will not only hamper the growth of the country's fast growing cellular phone sector but will also have an adverse effect on foreign direct investment and network expansion. The letter also noted that the government will still be benefited from other direct and indirect taxes paid by the cell phone operators as well as subscribers even if the duty is withdrawn. VAT and other taxes collected from the sector will be much more than any possible loss due to the withdrawal of the duty, they said. Referring to the contribution of the country's cellular phone industry, the letter said as the fastest growing industry it has helped increase the teledensity of the country. The increase of cell phone users has been 100 percent in the current fiscal reaching over five million, sources in the industry said. "The new tax will have dampening effect on the growth of the sector, particularly at a time when we are beginning to address the lower end market," a telecom ministry official said quoting the letter. It said, "This new tax, which is five times the present price of the SIM card, will significantly reduce the ability of the lower income groups and rural people to buy a subscription, and in turn the market growth will slow down considerably forcing operators to slow down network expansion." The telecommunications sector has been able to fetch one of the highest foreign direct investments (FDI) in recent times.
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