Last Updated on June 3, 2022
Internet costs could become slightly cheaper after the government lowered the tax on telecom services. The government has announced to cut TSC by 3% on ISPs. This would encourage the service providers to lower internet costs for the consumers.
Earlier in the budget speech for FY 079/80, Finance Minister Janardan Sharma announced that the government would lower TSC (Telecommunications Service Charge) on telecom services by 3%. Currently, service providers pay 13% TSC to the government. This will help drive down the internet cost by a slight.
Internet Service Providers Association of Nepal (ISPAN) says the internet cost will be cheaper by approx. Rs.17 after the tax cut.
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How do the current charges stand?
ISPs charge their customers Rs.500 under Internet Charge, and another Rs.500 under Support and Maintainance. Then, the 13% TSC brings another Rs.65 to the total.
The 13% VAT incurs another Rs.138.45 to the total internet cost. Adding all the costs including internet charge, support, maintenance, TSC, and VAT, the total internet cost amounts to Rs.1203.45.
| Internet cost | Internet Charge | Support and Maintenance | Current TSC 13% | After 13% VAT | Total Internet Cost |
| Existing | Rs.500 | Rs.500 | Rs.65 | Rs.138.45 | Rs.1203.45 |
After the 3% TSC cut
In the budget speech, the government announced it will cut the TSC by 3%. That means Rs.65 of TSC 13% will come to Rs.50 at TSC 10%. The Internet Charge and Support and Maintainance cost Rs.500 each. That is the total amount comes to Rs.1050.
After adding the 13% VAT (VAT amount Rs.136.5) the total cost comes to Rs.1186.5. The difference between the previous and the likely total internet cost is Rs.16.95.
| Internet cost | Internet Charge | Support and Maintenance | Revised TSC 10% | After 13% VAT | Total Internet Cost |
| Internet cost from next FY | Rs.500 | Rs.500 | Rs.50 | Rs.1050 | Rs.1186.5 |
The new cost revision could come into effect after the beginning of the next Fiscal Year 079/80 which is from Sharwan 1st. But how different the cost stands from now will depend upon each ISP and its policies.
For a long, cheaper internet cost has been the most sought demand of Nepali internet consumers. The speed war has revolutionized the internet speed in Nepal. However, it has mostly focused on speed and has not helped drive down the cost to the customers’ satisfaction.
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Too little too late?
The latest tax cut could be a good sign that the government has paid heed to the demands for cheaper internet. But it won’t make a huge difference. The 3% TSC cut only translates to an approx. Rs.17 less on the final bill for the internet consumers. This might not make everyone too happy.
Likewise, ISPAN in its press release has thanked the government for the tax cut and reminded consumers that it will “only” reduce the internet cost by Rs.17.
Are you satisfied with the government’s decision of a slim tax cut? Will the new tariff make any real difference to you? Do share in the comments below.
