Muhith warns companies of steps for not executing new VAT rate on Internet

Finance Minister A M A Muhith on Wednesday warned the companies concerned of taking tough actions against them for not executing new VAT (value added tax) rate on Internet.

In the budget for the fiscal year (FY) 2018-19, the government downsized the VAT rate on Internet to 5.0 per cent from the previous 15 per cent.

Accordingly, the Internet cost at consumer-end was supposed to go down from July 1, the first day of the new FY.

However, none of the Internet service providers, including the cell-phone operators, lowered the Internet charge until now.

"Steps will be taken against (the Internet service providers), if they do not implement the decision regarding VAT," Mr Muhith told newsmen at Bangladesh Secretariat when his attention was drawn to the issue.

The Internet users pay a total of 21.75 per cent VAT, duties and surcharge on their use. Of the total, VAT rate was 15 per cent, which the govt lowered to 5.0 per cent in the new budget.

The government earns nearly Tk 11 billion from these tax incidences.

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