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Broadband service providers are threatening to observe weekly service shutdowns of one or two hours across the country if a uniform rate of value-added tax (VAT) was not brought about for them and their customers by July.
Until 2017-18, the end-users paid a 15 per cent VAT on their internet usage while the internet service providers 15 per cent on their bandwidth purchases and another 15 per cent on purchases they made for transmission purposes.
In fiscal 2018-19 the government first made it 5 per cent for all. Later, it was made 5 per cent for the users but 15 per cent for the service providers.
In a virtual press conference yesterday, the Internet Service Providers Association of Bangladesh (ISPAB) said the two types of VAT they paid had increased their business costs by about 30 per cent.
Moreover, any rate less than 15 per cent was not eligible for rebates so the government should either withdraw VAT for all or bring in the same rate for all, be it 5 per cent or 15 per cent, the ISPAB said.
If the government did not do something about this VAT policy of the National Board of Revenue, they will have no option but to make customers foot this bill, it said.
The VAT policy has been bleeding them for more than a year, said ISPAB President MA Hakim.
“We have no intention to increase any fees as the internet has now become a basic need for people in this digital era but our backs are against the wall. To avoid incurring the charge we are seriously considering a countrywide symbolic internet shutdown.”
The association will wait for government response in July and continue with their course of action after discussions with members.
“It could be one or two hours in a week and will continue,” Hakim said.
Currently, there are 80.84 lakh active broadband connections in the country as of May, and according to the ISPAB’s estimate, 3.5 crore users are enjoying the fastest internet service from them regularly.
For the businesses to survive there is no option but to either increase service charges for end-users or compromise in service quality, said ISPAB General Secretary Imdadul Haque.
“We have yet to fix our course of action but this time we will take a hard line,” he said.
The telecom minister and ICT state minister agree with the internet service providers, the ISPAB said. Telecom Minister Mustafa Jabbar is said to have even sent a letter to the finance minister on June 24 informing the matter.
“If the government does not take our logical demand into consideration, we have no way other than to consider increasing charges and that could turn out to be by 30 to 40 per cent,” Hakim said.
This means that users who are enjoying the Tk 1,000 package, which is the most popular segment, would have to pay Tk 1,300 after August, he added.
The association also demanded to incorporate internet service in the information technology-enabled service (ITES) list for tax holidays. The government has so far recorded 22 categories of services in the ITES tax holiday list.
They are providing a good number of services that fall under the 22 categories but they have always been ignored by the government, Hakim said.
He said they would be able to create at least 1.5 lakh new jobs within the next couple of years if they were placed in the ITES list as the tax benefit would help them grow the market significantly.
ISPAB Senior Vice-President Rashed Amin Biddut and other leaders attended the event.
(TDS)
