Mobile Phone Tax to be Introduced in Bangladesh

June 8, 2012 Taxation in Bangladesh

Mobile Phone Tax in BangladeshDHAKA – With the intention of raising extra funds for social development programs and infrastructure improvements, Bangladesh will soon implement a new tax on the use of mobile phones.

On June 7th the Minister of Finance of Bangladesh Abul Maal Abdul Muhith revealed that the national government plans to introduce a new tax on mobile phone usage, which would be paid by consumers when buying a new prepaid recharge cards or paying their monthly mobile bills.

The new tax will be set at 2 percent, and will be charged on users across all of the country’s six mobile service providers.

According to Bangladesh Telecommunication Regulatory Commission there are currently 90 million mobile phone users in Bangladesh, with approximately 61 percent of the population of the country owning a mobile phone.

The new initiative has already received criticism from mobile operators in Bangladesh, with the heads of two of the major national providers Bangalalink and Grameenphone coming forward to say that the new charge will have a tangible negative effect on the welfare of mobile phone users with low incomes.

Commenting on the new tax, the secretary general of the Association of Mobile Telecom Operators of Bangladesh Abu Saeed Khan said that mobile operators are already “stretched to the hilt” in the country’s competitive mobile industry, and will not be able to offset the cost for the end users by reducing their tariffs any further.

Revenues raised from the mobile phone tax will be used to reduce the country’s budget deficit, and provide extra funds to finance social programs, including housing development, food subsidies and improving the country’s mobile network infrastructure.

The government of Bangladesh currently expects a budget deficit of 5 percent of GDP for the fiscal year ending June 30th 2012.

Photo by yisris