KATHMANDU, July 21: The government has claimed that imposing Telecommunication Service Charge (TSC) on internet service is aimed to make up for telecom revenues from voice calls that is continually declining in recent times.
Following huge criticism from the public about the TSC, the government said that they wanted to bring the internet services in the tax net, which has seen a massive growth as more people are using internet based communication tools in place of regular voice calls.
Speaking at a media meet on budget implementation on Friday, Revenue Secretary Shishir Kumar Dhungana said that the users have switched to internet calls from voice calls. Some of the popular social networking sites in Nepal are Facebook, Viber, Twitter, IMO.
“People are using these platforms to communicate with their contacts, which has caused decline in revenue collection from voice calls,” Dhungana said. “So, to make up for the declining revenue, the government has taken a decision to impose TSC on internet service.”
“Our study has shown that 40 percent voice call of Ncell and 25 percent voice call of NTC has been replaced by internet-based services,” Dhungana said. “Increasing demand of internet service has reduced the voice call revenue.”
He further said that Internet Service Providers (ISP) companies are not supposed to increase the internet rates to the consumers. The cost price of broadband services is quite low for the ISPs, and they can offer their services without raising consumer rates, he claimed.
“The amount collected from increased TSC on internet service will be used for installing optical fiber in all local units,” he added. He further assured that TSC on internet service will not make the service dearer.
He said that the prices the ISPs are paying to foreign companies are as low as only 20 percent of their cost.
“If this is not true then anyone can have cost sheet analysis of ISP companies. It will give factual information on cost and income of the companies,” he added. “Why the broadband, which comes at low-price in different parts of the world, is expensive in Nepal? There is no point to hike internet service charges.”
However, ISPs are arguing that as the finance minister himself has stated that TSC is to be collected from consumers, there is no reason to point fingers at them if they increase the internet prices. The government started levying 13 percent TSC on internet, apart from increasing TSC on voice telephony by 2 percentage points to 13 percent, effective from the new fiscal year that began Tuesday.