The Internet Service Providers Association of Nepal (ISPAN) and CAN Federation have called on Finance Minister Bishnu Prasad Paudel to reduce the tax rate on internet services.

Stakeholders met the minister today and handed him a letter of request urging a review of the tax rate on internet services.

Internet service providers (ISPs) have been demanding a reduction in the tax rate on everything from income tax to wi-fi routers.

As the government has categorised the internet under 'most essential' service, the ISPs have demanded that tax on the sector be slashed so that internet charge can be brought down in the country.

ISPs have proposed reducing the current 6.5 per cent tax on telecommunications service charges (TSCs) to zero per cent.

They have also demanded that the government reduce the TDS on bandwidth payment from 10 per cent to five per cent.

The ISPs have proposed to reduce the royalty from four per cent of the total revenue to two per cent and the mandatory contribution to the Rural Telecommunication Development Fund (RTDF) from two per cent to one per cent. The ISPs have said that since the government only sells frequencies to telecommunication service providers, it is not fair for private ISPs to pay royalties as they do not take frequencies.

Similarly, ISPs who are currently paying 30 per cent corporate tax (income tax) have demanded that it should be maintained at 25 per cent. ISPs have also demanded a review of tariffs on internet devices. Reducing tariff on import of these devices will provide some relief to consumers, especially the new subscribers. The ISPs have demanded that the customs duty on import of fibre cable and setup box be brought down from 15 per cent to five per cent.

In response, Minister Paudel assured the ISPs that the ministry will take a closer look at the issues raised and address the concerns of the stakeholders.

A version of this article appears in the print on April 16, 2021, of The Himalayan Times.