KATHMANDU, July 16: Internet Service Providers (ISPs) are set to charge 13% telecommunication service charge (TSC) to their users from the upcoming fiscal year- FY 2019/20.
The Nepal government had levied 13% TSC on the internet service on top of 13% VAT from the last FY 2018/19. The decision to impose it on the end users resurfaced after the government announced its continuation in the budget presentation on May 29, 2019. “It is a direct tax on the service so we are directly imposing it on the end users,” said Bhoj Raj Bhatta, president of Internet Service Providers' Association of Nepal (ISPAN). “We had already started imposing and billing the TSC on the users last year but a committee comprising of Nepal Telecommunications Authority, Ministry of Finance, ISPAN and MoCIT had agreed to take the decision back and adjust the charge within the ISPs and the government.”
“We had requested the government to review the tax imposition on the internet service but it seems like they have not given a thought to it so the imposition is inevitable,” Bhatta said.
Last year, the ISPs imposed the TSC on their users. However, they rolled back the decision to collect the 13% TSC from the users on July 26, 2018, after the decision received widespread criticisms from the public. The government had formed a committee consisting ISPs, Nepal Telecom and representatives from the Ministry to review the charge imposed on the end-users.
Binay Bohra, managing director at Vianet Communications, an internet service provider said, “The government had agreed to absorb 50 percent of TSC as maintenance support service but they have not implied by the agreement.”
According to Bohra, who is also an executive member of ISPAN said that the ISPs have been absorbing whole 13% of TSC throughout the year. “The ISPs cannot absorb the TSC forever,” Bhatta further added.
On the other hand, Ministry of Communication and Information Technology maintains that the charge will not be levied on the end consumers. “We are taking care of the business according to the agreement done regarding the issue,” Rishi Ram Tiwari, spokesperson at MoCIT told Republica, adding, “The process is underway so, the users won't have to pay the extra charge.”
Despite the ISPs' determination to charge 13% TSC to the users, the government has maintained that the charge would not be implied on the users. However, Nepal Electricity Authority (NEA) had increased the pole rental charge by 500 percent. Bhatta said that ISPAN has submitted the concerns to NEA and now await the review on the decision. He fears that if the fee is not reviewed, the internet price is expected to go further up the chart.