The Association of Mobile Telecom Operators of Bangladesh (AMTOB) on Tuesday called upon the government for revision of supplementary duty on mobile services in the proposed budget and reform of telecom tax policy.
The association came up with the call in an online briefing on the impact of proposed budget on the Mobile Telecom Sector. The speakers placed demands to reconsider some specific points for the sake of realising Digital Bangladesh.
AMTOB Secretary General Brig Gen SM Farhad (retd) along with the high officials of the mobile operators were present at the session including, Taimur Rahman, Chief Corporate and Regulatory Affairs Officer, Banglalink, Shahed Alam, Chief Corporate and Regulatory Officer, Robi Axiata, Hossain Sadat, Head of Public and Regulatory Affairs, Grameenphone.
AMTOB President Mahtab Uddin Ahmed said its matter of sorrow that the telecom taxation has once again moved further away from the spirit of Digital Bangladesh vision in the proposed budget for 2020-21.
“When we are frantically trying to close the digital divide, we see SD being raised yet again taking access to mobile connectivity beyond the reach of people with limited purchasing power. This very much flies in the face of the glorious vision of Digital Bangladesh,” he added.
Amtob president also alleged that the proposed budget doesn’t even attempt to address the long standing issues with the investment climate engineered by the taxation regime.
Drawing attention to the economic contribution of the telecom sector, Mahtab said the industry currently contributes 7 percent of the GDP which could easily hit double digital figure provided we fully appreciate the impact this industry can have on the economy.
“We can always explore innovative ways to increase revenue contribution from this industry to the Government exchequer without burdening the customers, and our shareholders; we are happy to collaborate with the Government to strike that winning formula,” he added.
AMTOB pleaded the Government to reconsider the following points for the sake of realising Digital Bangladesh:
Additional SD on mobile services
Imposition of additional 5 percent SD on the mobile services will not only increase the cost of services for the customers but also will contradict the Digital vision of the Government to ensure affordable digital services for all.
50 percent payment before VAT appeal
The requirement to make 50 percent upfront payment even before telecom operators could file for appeal against the VAT claims potentially empowers the authority concerned to make claims arbitrarily. This creates the backdrop of miscarriage of justice that will only further tarnish the country’s image in the global market.
Minimum tax rate
Sector-specific taxes lacks sound rationale. While mobile connectivity provides demonstrable socio-economic benefits, the rate of minimum tax faced by mobile operators is double that of an industry with well-established adverse consequences.
At the same time, this type of taxation imposes an asymmetric burden on operators that are struggling to make a profit, thereby reducing competitive forces in the market, creating a barrier to business expansion and to attracting foreign investment.
Corporate Tax rate remains unchanged
The corporate income tax rate for listed mobile operators is 40% and for non-listed mobile operators 45% of their profit.
The latter is the highest level imposed in Bangladesh, at par with the rate for the tobacco industry, and significantly higher than the general corporate tax rate for non-publicly traded and publicly traded companies.
Moreover, in this budget, the Government reduce the tax rate of publicly non traded company but no change for the Mobile Operators.