The government of Nepal will increase the excise duty tax on optical fiber cable import which is used for internet service. Finance Minister Dr. Prakash Sharan Mahat announced the decision in his budget speech FY 2080/81 reviving the fear that it could lead to an increase in the internet price in Nepal.
The minister said at the joint meeting at the federal parliament on May 29 that the tax on fiber cable will go up as per the new economic bill 2080.
The bill has an 8544.70.00 code number. Fiber cable is the most commonly used cable for fiber-to-the-home FTTH technology. Fiber has replaced copper wires for the internet service in Nepal.
From FY 2080/81, the government will impose a 15% tax on fiber cable imports. Currently, the tax on optical fiber import is 10% meaning an increase of 5% percent from Shrawan 01, 2080 BS.
Also read: 5G vs Fiber: Find Out Which Is Better?
Will an increase in fiber cable tax hike internet prices?
In recent years, internet price has become the most sensitive point in the market. Many consider that we pay too high in comparison to our per capita. When Nepal Electricity Authority imposed new rates on pole rentals, ISPAN warned that internet prices could go up. The 3% TSC tax rebate did little to help to lower the internet costs in Nepal. And while ISPs launched affordable internet packages, they are now quietly hiking the costs.
Again, the latest decision to levy a 5% more tax on fiber cable import may lead service providers to slap higher service charges to balance out the transaction. The end customers could be the ones to pay the price.
The government has prioritized broadband expansion to all local-level for the next fiscal year. But also, it is raising tax on the fiber cable which is used for the internet service. As usual, the government has never been able to be free of contradiction in its policies.
Check out: How to get internet connection in Nepal?
Let’s hope that the higher cost of fiber cable imports won’t translate to higher internet prices next fiscal year.
What’s your take on the government’s decision to raise tax on fiber cable imports? Are you concerned that it could make you pay more for your internet packages soon? Do share your feedback on it in our comment section below.
