Mobile use, tobacco items likely to be costlier

The government is likely to raise the supplementary duty on mobile telephone uses and tobacco products in the national budget for the 2020-21 fiscal year to meet the increased demand for resources amid the coronavirus pandemic.

The SD on mobile uses may be increased to 15 per cent from the existing 10 per cent, officials of the finance ministry said.

In addition to the SD, mobile users pay a 15 per cent value-added tax and 1 per cent surcharge on the talk-time and the messaging service while the VAT on mobile internet uses is 5 per cent.

The National Board of Revenue in the outgoing FY20 budget raised the SD on mobile uses to 10 per cent from the previous 5 per cent. 

The government first imposed a 3 per cent SD on voice calls, internet, SMS and other mobile phone uses in FY16 following a proposal by the National Board of Revenue.

The rate was upped to 5 per cent in FY2017.

Revenue board officials said that increasing the SD on mobile services was a sensitive issue and it would be finalised following the government’s decision.

Mobile phone and internet uses witnessed a significant rise after the government imposed the recent general holiday to arrest the coronavirus pandemic.

On the other hand, the SD on tobacco products, including cigarettes, bidi, gul and zarda, may go up by different degrees, they said.

The NBR may also revise the price slabs of cigarettes as part of its plan to collect more revenue from the sector.

The anti-tobacco organisations are also demanding additional taxes on the tobacco products considering their harmful effects on health.

In their budget proposals to the NBR, the organisations estimated that the NBR could fetch in additional revenues some Tk 10,000 crore through the introduction of specific taxes and a two-tier pricing system for cigarettes in the budget.

The World Health Organisation has recently said that lungs exposed to direct and indirect tobacco smoke were at greater risks of being infected with the coronavirus.

In Bangladesh, 37.8 million adults use tobacco and 41 million people are exposed to second-hand smoking at their own home.

Telecom and tobacco are the two biggest sectors for the NBR to earn revenues in terms of SD and value-added tax.

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