July 2, 2009

Budget Finalized: Not Really What ICT Demands

The national budget reflects the government's loyalty towards achieving Digital Bangladesh, but perhaps falls short with respect to give a clear route about the approach it will take to recognize the target. The options to overcome the odds to bring about a revolutionary change in rural lifestyle in terms of internet use, telemedicine help and e-education are quite a few and some of them could be addressed through budgetary measures.

Moreover controversial decisions like 25% duty on mobile phone handsets, remain SIM tax at Tk 800 doesn’t reflect the actual vision. Since then ICT specialists, Industry leaders, Telecom operators, Journalists, Bloggers as well as people related to ICT raised their voice to criticize government self destructing decision.

Operators blamed the tax on SIM card as the major digital divide between the rural and urban areas. They said such tax is one of the major barriers
to expanding their costly networks to the rural areas as these areas may not give a healthy return in terms of revenue like in urban areas. One option to close this divide could be withdrawal of the tax, which would ultimately increase the government's revenue collection through high sales and use of mobile connections.

As a result Finance minister AMA Muhith proposed to reconsider the import duty on mobile phone sets and SIM tax while speaking at a dialogue on 'State of the Bangladesh economy and budget reaction 2009-10' organized by Centre for Policy Dialogue. According to media report he personally apologized also.

The parliament on Tuesday passed budget for 2009-10 fiscal year. Regarding ICT, slight changes has been done to initially proposed budget, keeping some of the promise by Finance minister.

Tax on computer will remain as before (waived completely). No tax requires for Laptop up to Tk. 1 Lac and desktop up to Tk. 50 thousand.

Duty on mobile phone handsets with a price tag up to Tk. 50 thousand is reduced from 25% to 12%. For handsets worth more than Tk. 50 Thousand, he proposed duty to be fixed at Tk. 6000.

However, about SIM tax waiver, nothing is proposed.

So more or less it remains the same. But the most striking point to me is revised duty on Mobile handset. For a handset worth as minimum as taka three thousand, we have to pay taka 360 as duty which is still high compare to previous specific duty of Tk. 300/set. Moreover, duty for mobile sets worth Taka 50 thousand or more will be the same (taka 6000), which means rich people have to pay less to own a mobile set!!!

Do you think this is justified?


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