Telecom industry faces increased burden over higher supplementary duty: Telecom operators' association

The Association of Mobile Telecom Operators of Bangladesh (AMTOB) has expressed concerns over the government's recent decision to increase the supplementary duty on mobile services by an additional 5%, raising the total from 15% to 20%.

This move is anticipated to create significant challenges for both the telecom industry and mobile subscribers, according to an AMTOB statement today (6 June).

This increase in duty will elevate the cost of voice and internet services, placing additional financial pressure on users, particularly those from marginalised communities. The organisation warned that this could potentially lead to decreased mobile service usage, which would negatively impact businesses and reduce government revenue.

Additionally, the statement said the higher VAT on SIM cards is expected to discourage new users, further slowing the growth of mobile connections in a country where 45% of the population remains unconnected. AMTOB stressed that these measures will hinder the overall digitisation of the country, adversely affecting GDP growth and contradicting the Smart Bangladesh Vision of the Government.

In light of these concerns, AMTOB urged the government to reconsider these duties and take into account their earlier telecom budget recommendations to support the industry and ensure continued progress towards a digital Bangladesh.

Earlier, for every Tk100 recharge in mobile phones, people get only Tk75 as talk time and also for internet use as the government gets about Tk25 as value-added tax (VAT), supplementary duty, and surcharge. 

Now, the government will get Tk28.

Supplementary duty on mobile phone talk time and internet usage will be hiked by five percentage points.

So, people's mobile phone use costs will increase by another Tk5, in every Tk100 recharge and their usable amount will shrink to less than Tk62. In the case of internet usage, costs will also increase by Tk5.

Dr Ahsan H Mansur, executive director of the Policy Research Institute (PRI), told TBS, "It's a wrong decision to further increase tax on talk time and internet usage, as the country's telecom sector already has one of the highest tax rates in the world."