‘High taxation a setback to internet accessibility in Nepal’

KATHMANDU: The government has identified internet as an essential service but have been levied taxes on more than 10 headings making internet costlier.

In fact, the government has raised additional taxes on internet in recent years. According to internet service providers, the government has been charging 10 percent TDS when entering international bandwidth in Nepal.

Network service providers also charge an additional 10 percent fee when providing internet bandwidth. ISPs are required to deposit 4 percent of their total annual income in royalties and 2 percent in rural telecommunications development fund (RTDF).

The government had decided to impose an additional 13 percent telecommunication service fee through the last budget as well. Apart from this, service providers are also levied 13 percent VAT and 30 percent corporate tax. In addition, the government has imposed 15 percent tax on service expansion, 5 percent custom duty on drop cable and 5 percent custom duty for routers and other switches.

At an programme organized by Society of Economic Journalists Nepal (SEJON), service providers said that taxation in internet in Nepal is high making internet cost high. Speaking at the programme, Sudhir Parajuli, president of Internet Service Providers Association of Nepal (ISPAN), said that it was ironic that the government is imposing high tax on essential service like internet.

“Why is there low tax in other essential services but high while it comes to internet?” he questioned, adding, “The government itself is making internet costlier in Nepal.”

He said that the cost of internet distribution has gone up in Nepal also because available infrastructures are not shared. He said that the government should allow internet service providers to share infrastructure by opening infrastructure company as soon as possible.

Binaya Bohara, managing director of Vianet Communications, presented the fact that the tax on internet in Nepal is high. “Internet sector is one of the most taxed areas in Nepal,” he said. One of the reasons behind high internet cost in Nepal is high rate of rental charge imposed by NEA, as per him.

“Despite being an essential service, internet is not accessible to all due to unwanted taxes being imposed,” he said. On the occasion, Nepal Telecommunication Authority (NTA) spokesperson Min Prasad Aryal said that expansion of broadband internet by 10 percent would contribute 1.3 percent to the GDP.

He claimed that the government is trying to reduce the cost of internet to 5 percent of annual per capita income in the recent future. Aryal and other participants also said that telecommunication sector and services in Nepal were satisfactory compared to other South Asian countries.

Fiscal Nepal |
Thursday February 18, 2021, 10:59:19 AM |

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