The GSMA, which represents the interests of the worldwide mobile communications industry, has urged the Bangladeshi Government to eliminate the tax on SIM cards. The GSMA says that the growth of the mobile industry in Bangladesh has come to a halt due to increases in taxes across the board on mobile services.
The SIM card tax of Tk. 800 (US$11.6) per connection of each new subscriber is the single largest obstacle to the acquisition of new subscribers, constituting a major barrier to growth and blocking new investments in updated mobile networks that provide broadband via mobile infrastructure.
Increased mobile penetration in Bangladesh in recent years has given access to not only voice communication but data access to the internet to rural areas, which were beyond reach otherwise. Today, mobile connections in the country are 46.7 million - 32% penetration but despite this significant growth, Bangladesh remains below its neighboring countries in terms of mobile and internet penetration. Moreover, mobile adoption growth rates have been consistently falling in the last three quarters and now stand below 3% per quarter, which can be directly attributable to this damaging taxation.
Click here to see full article
Ricardo Tavares, Senior Vice President, Public Policy, GSMA commented that "The SIM card tax is counterproductive as it represents a wall that low income consumers have to climb before having a mobile phone connection. The SIM card tax increases the total cost of ownership of a mobile phone and actually reduces total tax collection by the government from the industry. It is a negative proposition all round, as consumers lack access to mobile services, the government loses with lower tax collection as the number of users declines, and mobile operators have a diminishing customer base. The elimination of the SIM card tax is essential to re-establish the growth path of the mobile industry in Bangladesh and would work in a counter-cyclical way stimulating the whole economy." The GSMA believes that Bangladesh's telecommunications taxes need to be reformed if the world's seventh most populous country is to realize its full potential, and gain the social and economic benefits that have been proven to flow from the widespread use of mobile phones. The GSMA recommends the removal of the entry barrier of Taka 800 SIM tax to make mobile connections affordable to its unconnected 70% population and bring the benefit of access to information to the people especially from remote rural areas. The National Budget of 2009-2010 continued to retain the provision of SIM Tax at Tk. 800 for each new connection of mobile subscription. The GSMA urges the government not to wait until next year's budget but to eliminate the SIM card tax immediately, due to the generalized losses for consumers, the government and industry.
Source: Cellular News