15 percent tax on optical fiber and 10 percent tax on SIM cards

Now 15 percent excise duty will be levied on optical fiber and 10 percent on SIM card. As stipulated in the Economic Act 2080, the new tax has been implemented with the start of the new financial year.

In the last financial year, the excise duty on optical fiber was 10 percent, but in the current financial year, it has been increased to 15 percent.

In addition, the excise duty on SIM card has been increased. In the last financial year, SIM excise duty was 5 percent but now it will be 10 percent in the current financial year.

While the service providers are demanding tax reduction, the government is also increasing the tax. Due to this, the internet may become more expensive in the near future.

President of Internet Service Providers Association of Nepal (ISP) Sudhir Parajuli said that the government is increasing taxes on essential services like internet.

‘The government has not been able to separate the internet and telecom business. The state is taxing internet and mobile companies at the same place,” he said. That should be an improvement.’

Only 35 percent of homes in Nepal have access to fiber internet so far. 65 percent have not yet reached their homes. Internet has reached most of the district headquarters through fiber. Fiber internet is yet to reach villages. If the tax increases, it will be a problem to reach fiber internet to the villages. Because if the tax increases, the cost will also increase.

On the other hand, Shobhan Adhikari, the spokesperson of Nepal Telecom, said that after the increase in excise duty, the cost will also increase. ‘When the excise duty increases, the cost also increases,’ he told Icity News, ‘How to adjust the increased cost depends on the service provider. Telecom has not yet decided what to do.’

After the increase in excise duty, the cost may be borne by the service provider himself or the customer may also have to bear it. It will depend on the decision of the service provider. If the customer has to pay, the internet service will be expensive.

He said that if the tax on optical fiber is increased, the cost of internet will increase and it will be difficult to fulfill the target set by the government.

We said that the tax on the Internet should be reduced. But Sarka has increased it even more,” he told Icity News. “We say that we should not increase taxes, but reduce them. It hurts more than telling the government.’

In Nepal, internet is coming from Biratnagar, Birganj and Bhairahawa now. The most investment of internet service providers is in optical fiber.

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