Taxes on mobile, SIM should go

Imposing taxes on mobile phone sets and SIM cards will create impediments to fast expansion of information technology at a time when the government is trying to build a Digital Bangladesh, economists and information technology experts said yesterday.

They recommended withdrawing the 25 percent tax on mobile phone sets above a certain price and 15 percent VAT on Internet use so that a possible digital divide can be averted.

Imposing more taxes will increase smuggling of mobile phone sets while flawed policies might create a digital divide, observed the speakers at a seminar styled "Contribution of the proposed budget in building digital Bangladesh: the problems and gaps" organised by Dhansiri Media Production House at Sonargaon Hotel.

Finance Minister AMA Muhith assured the speakers of considering their demands and recommendations.

"Imposing 25 percent tax on mobile phone sets is suicidal," said Debapriya Bhattacharya, fellow of Centre for Policy Dialogue.

Once the rich only could avail themselves of mobile phones, he said, adding that if the prices of mobile phone sets go high now, the technology will again go beyond the reach of the poor. He said mobile sets valued between Tk 3,000 and Tk 5,000 should be out of the tax net.

Debapriya noted that the Tk 800 tax on SIM cards would also create similar problems.

Information technology expert Mustafa Jabbar in his keynote paper proposed keeping mobile phone sets priced up to $100 out of the tax net and withdrawing VAT on Internet use.

Mobile phone operators said imposing more taxes would increase illegal import of mobile phone sets and smuggling of money.

Economists at the seminar cautioned the government of a digital divide in case of flawed policies.

Regulatory Reforms Commission Chairman Dr Akbar Ali Khan said e-governance is the most vital thing that the government should concentrate on.

Only providing computers is not enough, he said, adding, "It is the legal and bureaucratic procedures that need change. Human resources development is a must for it."

Former finance adviser to caretaker government Mirza Azizul Islam said, "We have to think how to take digital facilities to the 40 percent people living under poverty line."

The whole issue should be looked at from the economic perspective, he said. "We must think how we can provide incentives for schools in rural areas for computer literacy and bring the 40 percent people out of poverty."

Bangladesh Economic Association President Prof QK Ahmad put emphasis on providing schools with computers and training of teachers.

The finance minister said 4 crore people in Bangladesh now use mobile phones while cyber cafes operate even in remote rural areas. "It is not important that all own mobile sets or computers with Internet connection, but we should ensure that they have easy access to such facilities," he said.

Muhith said the government is framing a policy in this regard. All government officials of the deputy secretary rank will be trained in computer usage by this year.