Laxmi Capital News
Communication sector provisions contradictory

Though thegovernment had earlier adopted the policy to reduce cost of telecommunicationsand internet services in the country and increase people’s access to suchservices, a few provisions introduced in the federal budget for fiscal year2018-19 seems to be contradictory.

The first federalbudget unveiled by Finance Minister Yubaraj Khatiwada, on Tuesday, announcedincreasing income tax for internet service providers (ISPs) and telecom serviceproviders by five percentage points to 30 per cent.

Similarly, thegovernment has also increased the service charges levied on telecom operatorsby two percentage points to 13 per cent. Such service charges are not levied onISPs.

Sudhir Parajuli,chief executive officer of SubisuCableNet, said that by hiking the charges, thegovernment has contradicted its own plan to increase people’s access toinformation and communication technology (ICT) and increase internetpenetration through the budget.

“On the one hand,the government says that it will promote the use of technology in differentsectors, while on the other, it increases the taxes on ICT sector, which iscontradictory to each other. This will surely affect the price of internetservices and people’s access,” said Parajuli.

According to him,the government should instead bring down the existing tax slabs being imposedon ICT sector to increase the penetration of internet and technology in Nepal.

Though telecomoperators like Nepal Telecom (NT) and Ncell are unwilling to comment on thisissue, an official of a reputed telecom operator said that increasing incometax and service charges in the telecom sector will make telecommunicationservices dearer in Nepal. The telecommunication service cost in Nepal isalready one of the highest in the South Asian region.

Meanwhile,officials of Nepal Telecommunications Authority (NTA) – the telecom sectorregulator of the country – said that though increase in income tax and servicecharge in the telecommunications sector is not good, internet andtelecommunication service costs are unlikely to go up. “Income tax and servicecharge are just two out of the many parameters that determine the cost oftelecommun

Source: The Himalayan Times, 31st May2018

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