Mobile talk-time tariffs set to rise


DOULOT AKTER MALA | Published: January 07, 2025 00:25:47


Mobile talk-time tariffs set to rise


Mobile talk-time is likely to get dearer as the revenue authorities have decided to increase taxes on mobile talk-time by 3.0 per cent from existing 20 per cent.
An ordinance to this end might be issued this week, according to officials.
In another development, direct taxes on motorcycles, refrigerators and air conditioner (AC) manufacturers may go up through amending the Income Tax Act.
VAT on LPG (liquefied petroleum gas) may also rise by 0.5 per cent.
Both corporate tax and advance income tax would be hiked to phase out the reduced tax benefit.
The increased AIT on manufacturers is likely to take effect this year while the corporate tax hike may be implemented in the next fiscal budget.
Refrigerator, AC and motorcycle industries are enjoying a 10-per cent corporate tax and 4.0-per cent AIT at a reduced rate.
Official sources said AIT might be going up to 4.0 per cent and corporate tax by 10 per cent. Tax benefit is scheduled to expire on 30 June 2032.
However, the decisions have fretted investors who are surprised at such sudden decisions without stakeholders' consultations.
Sharfuddin Ahmed Chowdhury, head of Communications at Grameenphone, said, "At a time when the economy is still recovering with inflation remaining above 10 per cent, this additional burden will pose significant challenges for consumers already struggling with daily expenses."
"If SD is increased, this will be the second time in the last seven months. It was increased by 5.0 per cent in June 2024, and now if again 3.0 per cent is increased as reported in media, it will result in a 9.2-percentage point increase in indirect taxes on customers within just seven months."
"For every Tk 100 spent on mobile usage, customers will now have to pay Tk 142.45 (inclusive of VAT, SD and SC), compared to Tk 133.25 before the last budget. As an industry committed to fostering digital inclusion, we believe this move will hinder progress and widen the digital divide. We urge the government to reconsider this decision in the interests of customers and for attaining the broader goal to build a digitally inclusive society," said Mr Chowdhury.
The government's decision to raise the supplementary duty on mobile services from 20 per cent to 23 per cent is expected to increase costs, impacting customer affordability amid rising inflation, said Taimur Rahman, chief corporate and regulatory affairs officer of Banglalink.
Months ago, the supplementary duty was raised from 15 per cent to 20 per cent in the last budget, which already posed challenges for both customers and the industry, he added.
Moreover, this move could widen the digital divide, hinder sector growth and reduce government revenue, he said.
"We urge the government to reconsider this decision to ensure sustained economic progress and digital inclusion."
SM Shoyeb Hossain Nobel, additional managing director of Walton Hi-Tech Industries PLC (WHIPLC), said such a decision would give a negative signal to potential investors as the government has promised to offer tax break until 2032.
"We have found our decision wrong to expand the industry. The manufacturing industries are already experiencing de-growth due to several factors."
Walton has taken the investment decision following impressive growth in 2018, 2019 and 2021 and a stable trend afterwards, he added.
"The items we manufacture are at the bottom of purchasing lists of the consumers now...," said Mr Nobel.
"The private sector is the major contributor of employment generation. So, the government should facilitate it for the sake of greater interest."
Forhad Hossain, chief financial officer of Smart Technologies Bangladesh Limited, said the erosion of purchasing power due to inflationary pressure has led to a decline in consumption of such products.
"Overall cost of doing business will escalate significantly due to increasing tax burden on consumers," he added.
Manufacturing industries are struggling to survive due to fluctuation of dollar against local currencies that has escalated import costs, according to Mr Hossain. Currently, complete freezer, refrigerator, motorcycle, AC and compressor manufacturing companies are entitled for the reduced tax benefit on their income derived from such items.
However, there are certain conditions to avail the benefit from the first day of their commercial production.
Manufacturing companies, which need to be registered under the Company Law-1994, have capacity to manufacture own mold and dice, facilitates for waste management, poly urethane foaming plant, powder coating plant.
Such companies must have approval from the NBR.
As per Statutory Regulatory Order (SRO), the company has to reinvest 10 per cent of their tax exempted income to its existing plant or any new ventures within a three-year period after the starting day of availing the benefit.
On such investment, the taxpayer must have proof and necessary supporting documents of the investment.
Any companies reconstituted or transferred or divided from another one would not be eligible to avail the benefit.
A senior tax official said the government would have to meet the IMF's condition to mobilise an additional Tk 120 billion taxes within next six months.
Earlier, the IMF mission told the NBR that they have no room to negotiate the withdrawal of tax benefits within this year as agreed by government high-ups.
However, the NBR official claimed tax hikes would have less impact on marginal income people as taxes on most of the essentials have been exempted to contain inflation.

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