People are very worried to see the National Board of Revenue’s new VAT scheme. The scheme should be revised to be easier on both our people and those who like to provide services. Many are happy to hear that the NBR has reduced taxes on web and smartphone-related services, which would have been very painful for us if they had not considered it.
In the initially announced VAT scheme, the ordinance had raised VAT rates under service codes S012.10 and S012.14 to 23% for telephone services and 10% for internet service providers (ISP), an expense which telecommunications and broadband service companies would have had passed on to their customers. While a 3% increase in mobile service duties may not sound much, ISPs in Bangladesh have had to pay a 0% duty which has led to the fast penetration of home networks in Bangladesh over a relatively short period of time.
According to the Bangladesh Association of Software and Information Services, this would have genuinely impacted Bangladesh’s formidable freelancer community who are given outsourced work from foreign companies. As things stand, over 300,000 young professionals — 20% being women — are engaged in the IT sector, alongside the more than 600,000 freelancers who heavily rely on internet services for their work.
If anything, there is perhaps an argument to be made that the cost of internet and mobile services should be lowered, if anything, especially considering that the average speed of the internet has remained largely stagnant for years now. Indeed, as more and more of our professional lives start shifting to the internet, Bangladesh will need its digital services to be better, faster, and cheaper above all.
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