VAT complexities: Internet service providers threaten service suspension

Internet Service Providers Association of Bangladesh (ISPAB) on Saturday threatened to suspend broadband connection for 2/3 hours daily if the complexities over Value Added Tax (VAT) in the sector is not resolved within this month.

They sought the Prime Minister’s intervention in resolving the complexities.

The internet service providing organisations made the appeal in a virtual press briefing, UNB reports.

“We demand solution to VAT complexities as well as inclusion of ILDC, IIG and ISP industries under Information Technology Enabled Services (ITES) category,” said ISPAB President Md Aminul Hakim.

“Initially we will suspend internet service for 2/3 hours and then we’ll extend the duration of suspension after consultation with members,” he said.

Md Aminul Hakim said the bill collection has been reduced by 40 to 50 percent due to Covid-19 pandemic although their staff have been working amid health risk.

The imposition of 5% for ISPAB internet and 15% for ITC, IIG and NTTN sectors of value chain has created complexities in this sector, said Hakim adding that “We want the Prime Minister’s intervention in resolving the problem.”

If the VAT complexities are not resolved, the activities in this service sector might face interruption, he added.

He also said that if this problem is not resolved, the price of internet service might be increased by 30 to 40 percent at the consumer level.

Earlier on April 5, the ISPAB sought Tk 610 crore government grant to keep the services uninterrupted and protect the sector from losses during the coronavirus outbreak.

ISPAB submitted an application to the Telecom Minister Mustafa Jabbar in this regard as well.

They have been demanding for withdrawal of VAT of the internet service providers for at least two years.