regressive tax


In its 2005-06 budget (Khaleda Zia) the Bangladesh government imposed a regressive Taka 900 tax on each SIM that was issued.   We describe the tax as regressive because, if it was passed on to customers, it would hurt the low-user segment (generally the poorer segment) of the market more, because it’s a fixed tax that does not vary with use. The mobile operators did not quite understand what the government wanted to do and decided to absorb the tax.  They made various pleas and protests and got the tax reduced to Taka 800.  Finally, in 2008, they decided they had enough and decided to pass on most of the tax to customers.