Internet users are likely to get a boost tomorrow as possibilities are there for the finance minister to slash the value-added tax on internet use in the national budget for 2018-19.

Finance Minister AMA Muhith has recently said he would keep his promise of revising the VAT on internet use in the budget, Telecom and ICT Minister Mustafa Jabbar said.

“It is a longstanding demand of ICT-related trade bodies and it is expected to be met in the upcoming budget. Definitely, the waiver of the VAT will directly help establish the digital culture in the country.”

Currently, there is 15 percent VAT on internet use. However, if internet is used on mobile phones, users face 5 percent supplementary duty and 1 percent surcharge. This means a mobile phone user has to spend Tk 121.96 to use Tk 100 worth of internet.

In the last few years, mobile telecom operators, internet service providers, software and services industry, e-commerce and other digital services industries have been demanding withdrawal of all types of taxes on internet use. As of April, there were 8.59 crore active internet connections in the country, according to Bangladesh Telecommunication Regulatory Commission.

Of them, 8.02 crore are connected to internet through the mobile network and 57 lakh use connections of internet service providers.

If such tax is withdrawn, the use of internet by the youth will surely increase, which will ultimately help the government compensate for the loss of VAT, Jabbar said.

The government earns Tk 1,100 crore every year from VAT on internet use, according to the Association of Mobile Telecom Operators of Bangladesh.

If the government waives the VAT it will take the country one step closer to the digital economy. The related sectors will also be able to earn more, according to the association.

Internet is a daily necessity like food and water in the digital age, so its consumption should not be taxed, officials of Bangladesh Association of Software and Information Services said.