Internet tax to be reduced

The National Board of Revenue (NBR) has decided to reduce the 23 percent supplementary tax on mobile phone calls, internet use and IT services and restore the previous 20 percent tax after a long-standing protest by internet service providers.

According to NBR sources, the 10 percent supplementary tax imposed on the services of Internet Service Providers (ISPs) has also been withdrawn. This tax was imposed on January 9, but as per the current decision, it has been completely withdrawn.

In addition, the supplementary duty on telephone services (talk time, internet usage, etc.) using a mobile phone SIM or RIM card was increased from 20 percent to 23 percent, which has been restored to the previous 20 percent.

NBR Second Secretary Badruzzaman Munshi said that a notification will be issued by Sunday to reduce VAT rates on some products. Discussions are underway on several important products, but a final decision has not been taken yet.

In addition, it was decided to increase the VAT from 10 percent to 15 percent on restaurant services, but later it was reduced to 5 percent again. Decisions have been made to reduce VAT on some other products or services, such as clothing and non-AC hotel services, whose VAT rate has been reduced from 15 percent to 10 percent. Notifications are being issued in this regard.

On January 9, an ordinance was issued increasing VAT and customs duties on more than 100 goods and services. However, in a time of high inflation, it faced widespread criticism and the government had to review this decision.