A report from the Innovation and Information Technology Foundation has been used as the basis for a good report in the Daily Star on the situation in the worst offender, Bangladesh. Of course, it did not hurt that they sought our comments. Our comments were based on the findings of the Systematic Review we completed on the benefits of mobile phones.
For instance, in Bangladesh, the telecom infrastructure providers pay 55 percent taxes to import capital equipment and 24 percent for optical fibre cable. Mobile handsets are slapped with 21 percent duty when they enter the country.
“Mobile phones are the most widely accessible form of ICT available in countries like Bangladesh. The evidence suggests that it is counter-productive to treat ICTs as demerit goods and tax them over above what other goods are. If anything, there is a case for lower-than-normal taxes,” Rohan Samarajiva, founder chairman of LIRNEasia, a Colombo-based ICT think-tank, told The Daily Star.
Dilip Pal, chief financial officer of Grameenphone, said the telecom sector in Bangladesh is faced with the highest tax rates in the world; the higher taxes make it harder for operators to extend even lower rates to customers and still remain a business.
“In light of chronic declining average revenue per user’ figures, in my opinion, higher tax rates only deter adoption of IT solutions among the majority of potential IT service users — which is definitely not good for the country going forward.”