DHAKA: Amid the growing number of mobile users across the country, the government has proposed to increase the value added tax (VAT) by 5 percent on imports of mobile phones in proposed budget for 2014-15 fiscal.

The government is also likely to impose a fixed tax of Tk 100 on the supply of every single piece of replacement SIM to ensure transparency.

Finance Minister AMA Muhith made the proposals while placing the budget for the next financial year before the parliament on Thursday afternoon.

At present, companies, who are assembling mobile phones inside the country, pay 15 percent VAT at the assembling stage and companies, who import mobile phones, pay 10 percent VAT on the import.

The differentiation in VAT creates “uneven competition” between local assembling industries and imports, according to Muhit.

“In view of this, I propose to impose 15 percent VAT on mobile phones at the import stage," Muhit said.

At present, there is a fixed tax of Tk 300 on the supply of every single piece of SIM card by the mobile operators and this will continue.

“There has no such tax on the supply of replacement SIMs. It causes inconvenience in revenue accounting. In order to ensure transparency, I propose to impose a fixed tax of Tk. 100 on the supply of every single piece of replacement SIM,” said Muhith.

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BDST: 1735 HRS, JUN 05, 2014