Telecom experts urge govt to slash taxes
KATHMANDU:
Telecommunication experts on Thursday underlined the need to reduce taxes on telecom services to make services more affordable. They said different taxes being collected from customers and telecom companies have been increasing the cost for end-users.
Simon Molloy, International Telecommunication Union (ITU) expert said that the government should treat the telecom industry as a source for overall growth and productivity rather than taking it just as a source of ‘easy revenue’. He said so when addressing a workshop on ‘Assessment of Nepal’s Telecommunication Market and Spectrum Issues’.
The government has been collecting taxes like 10 per cent telecom service charge and 13 per cent value added tax from customers, among others for the service they use. The telecom industry is also a big revenue earning sector for the government as it collects taxes under different heads, which include income tax, spectrum fee, four per cent royalty and two per cent contribution in the Rural Telecommunications Development Fund (RTDF) from telecom companies from their annual income.
“There is a need to avoid taxation systems that discriminate on an industry basis,” said Molloy, who is also carrying out a study on the Nepali market and issues. Earlier, on Thursday, addressing the inaugural ceremony of the workshop, Minister for Information and Communications Minendra Rijal said that the ITU study will help make quality telecom services available at an affordable price in country.
Experts and other participants in the programme said that the government should decide on spectrum allocation modalities, tax provision depending on the market, and bring a provision for infrastructure sharing to reduce investment, which will help make service cheaper. According to Molloy, there has been ‘unequal treatment’ of operators like in licence renewal fee, which had created a dispute requiring a revision in regulatory provisions.
Amid spectrum assignment being one of the most debated issues and having no proper long-term planning for frequency use, experts have also urged the government to prepare a spectrum roadmap to guide development in telecom sector. Joe Guan, advisor of Spectrum Policy and Regulatory Affairs, Asia Pacific, Groupe Speciale Mobile Association (GSMA) said that with the demand for data growing globally, it will be necessary to make more spectrum available to avoid network congestion and higher price of services. Even though there is no such roadmap till date, Nepal Telecommunications Authority (NTA) for the last two years has been planning to auction high value spectrum, including for 3G and 4G service, and has also fixed a base price of Rs 120 million per MHz for 3G. “Auction of spectrum has to reflect the long-term economic values and not to maximise short-term revenue for the government,” said Guan.
In the workshop, Basheerhamad Shadrach, Asia coordinator of Alliance for Affordable Internet (A4AI) said that Nepal’s data penetration rate was good as compared to that of Pakistan (10.84 per cent) and Bangladesh (6.86 per cent). “Our survey conducted in 193 nations shows that Nepal, with an estimated population of 28 million, has 12.13 per cent data penetration rate,” he added.
Studies have shown that 10 per cent rise in broadband penetration rate contributes to 1.38 per cent growth in national GDP and each 1,000 broadband users create 80 jobs. Ananda Raj Khanal, officiating chief of NTA said that if internet service providers are ready to pay fixed fees, they are ready to discuss on provisions to allow such companies to acquire unified telecom licence. The permit allows companies acquiring it to operate mobile broadband service besides nationwide voice telephony service.
Source: THT
