NBR seeks enactment of law to impose mobile use surcharge

February 16, 2015

The National Board of Revenue has sent a proposal to the finance ministry for enacting a law for imposing surcharge on mobile phone services including talk time.
The board made the proposal in the past week as the law ministry in late January sent back a draft Statutory Regulatory Order imposing 1 per cent surcharge on mobile phone uses, said officials concerned.
They said that the law ministry sent back the draft order sent by the board for vetting observing that imposition of any surcharge on mobile uses required enactment of a law.
The law ministry also sent the board a draft bill titled the Surcharge and Levy (Imposition and Collection) Act 2015 for the enactment.
The board also referred the draft bill to the fiancé ministry seeking its enactment, the officials said.
If the fiancé ministry agrees with the proposal, the bill will need to the placed before the cabinet seeking its approval and on such approval the bill would be tabled in parliament for enactment.
The revenue board imposed three different surcharges on tobacco products, environment polluting industries and imported mobile handsets by the Finance Act 2014 in the budget for 2014-2015 financial year.
There is no provision in the Finance Act that allows imposition of the surcharge, the law ministry said in its opinion.
The revenue board, however, took a move to impose the surcharge on all types of mobile services such as voice services, SMS and MMS services, internet and other services provided by the mobile phone operators to boost revenue collection in line with an instruction of the finance ministry, the officials said.
The finance ministry gave the instruction following a recommendation the prime minister, Sheikh Hasina, made in her budget speech in parliament on June 28, 2014.
The cabinet on September 15, 2014 endorsed a proposal of the revenue board in this connection.
Initially, it was decided that the board could introduce the surcharge by a gazette notification and the board sent a notification to the law ministry for vetting.
According to the proposal, mobile users will have to pay the tax while mobile phone operators will deduct it from the users’ account and deposit to the government exchequer.
According to an assessment of the revenue board, about Tk 140 crore a year can be collected if the surcharge is introduced.
Currently, mobile users have to pay 15 per cent VAT for enjoying any mobile services provided by the operators.
The country’s about 11 crore subscribers spend about Tk 14,000 crore annually for getting services provided by the six mobile phone operators —Grameenphone, Robi, Banglalink, Airtel, Citycell and state-owned Teletalk.
According to revenue board officials, surcharge is that kind of tax which is imposed in addition to the existing taxes, duties, VAT and fees at production, supply, import and other stages of products and services while levy is included within the duties at any stages of products and services.

-With New Age input

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