Budget likely to up SD on mobile use to 10pc

Use of mobile phone is likely to be costlier with a two-fold hike in the existing Supplementary Duty (SD) on voice and data services in the budget for the upcoming fiscal year (FY), 2019-20.

Finance Minister A H M Kamal might propose the hike in his budget speech today (Thursday), raising the SD to 10 per cent on mobile phone services and mobile SIM or RIM cards.

The upward revision, if implemented, would raise costs of voice call and data use.

Currently, there is a total of 21.75 per cent tax, including 15 per cent Value-Added Tax (VAT), 5.0 per cent SD, and 1.0 per cent surcharge, on mobile phone use.

The tax rate would hover to around 27 per cent, if the government increases the SD in the budget.

Sources said a big chunk of revenue will come from telecom sector in FY 20 following execution of the tax measure.

The National Board of Revenue (NBR) imposed the SD on mobile phone use in FY 16 in a bid to tap the potential sector.

Meanwhile, price slabs for all tiers of cigarette and bidi might be revised upward in the budget, while their SD rates might remain unchanged.

A new Advance Tax (AT) at a rate of 5.0 per cent might be imposed on import of all products instead of Advance Trade VAT (ATV).

On the other hand, the NBR might reduce the existing area-wise tax amount to attract undisclosed money-holders to invest in real-estate sector.

According to the Income Tax Ordinance, the untaxed money-holders can legalise their money through construction or purchase of residential buildings or apartments.

For this, they have to pay tax at varying rates for different cities and areas in the country, amounting to up to Tk 7,000 a square metre and starting from Tk 700.

Officials said the government has selected some potential sectors, from which a significant amount of revenue can be mobilised to achieve an ambitious revenue collection target of Tk 3.25 trillion for FY 20.

According to the Bangladesh Telecommunication Regulatory Commission (BTRC), the country has a total of 160 million mobile phone users until April 2019.

According to a recent report of the GSMA, the global association of mobile operators, Bangladesh's mobile phone industry has attained a rapid growth over the last decade. Bangladesh is the fifth largest mobile market in the Asia-Pacific region and ninth largest in the globe.

Currently, minimum call tariff for the subscribers of Grameenphone is Tk 0.5 per minute, excluding VAT, SD and surcharge, while it is 0.45 for the subscribers of other three operators.

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