The representatives of Association of Mobile Telecom Operators of Bangladesh-AMTOB have placed 21-point proposals regarding income tax, value added tax, import duty and supplementary duty in the upcoming budget.
On Tuesday, March 5, 2024, the proposals were presented at the pre-budget meeting held at National Board of Revenue (NBR).
Regarding the proposal, AMTOB Secretary General Lt. Col. Mohammad Zulfikar (retd) said — As we know, the mobile industry sector is one of the main sources of telecommunication and internet access in the country. The overall digitization of the country is directly dependent on the infrastructure of this industry. Besides, all sectors including banking, mobile financial services, ride sharing, e-commerce, education, or e-courier are being managed directly or indirectly through mobile services. The overall growth of this sector is the determinant of the inclusive growth of all other sectors. But unfortunately, the miscellaneous taxes levied on this sector are relatively high compared to other sectors of the country and this level is quite high compared to other countries of the world. We discussed these matters with the top officials of the National Board of Revenue and presented our recommendations. We hope that the NBR will consider the issues discussed seriously and thereby demonstrate the government’s willingness for digitization in the country.”
Among the recommendations raised by MTOB were:
avoidance of Duel taxation and double taxation (PSR) due to the same failure: Failure to file proof of return (PSR) provides for additional taxation at the rate of 50% under the Income Tax Act. This results in double taxation on the same expenditure which is against the principles of Income Tax Act. We request that this policy be waived.
Clarifying the obligation of all government agencies to submit returns: We have requested to clarify such matters in the case of all government agencies such as Bangladesh Telecommunication Regulatory Commission, Bangladesh Railways, Election Commission, etc., who accept charges.
Reduction or rationalization of high rate of corporate tax: Current tax rate is 40% for mobile operators listed on stock exchanges and 45% for unlisted companies. The general corporate tax rate is 27.5% for unlisted companies and 20% for listed companies. We have proposed not to classify mobile operators separately but to reclassify them in line with other companies and reduce tax by 10% in respect of listed companies.
Minimum Tax Adjusted and Deducted as Unadjusted Figures: At present companies are forced to pay minimum tax even if they make losses in business. Although tax rules allow set-off of business income against losses incurred in previous years, the company still has to pay minimum tax. We have proposed to include scope for minimum tax adjustments to ensure both the revenue of the Government and the rights of the assesses.
Focus on SIM supply: Removal of value added tax on SIM supply will have a positive impact on mobile expansion in rural areas, which will in fact contribute to the government’s goal of digitizing the whole of Bangladesh and ensure the development of the mobile telecommunication industry. We have proposed removing the mask on all SIM supplies, including e-SIM.
MOSC on government regulatory bodies: Government institutions and regulatory bodies are not following MOSC regulation proportionately. Due to which the operators have to suffer. Clear guidance is needed to resolve this issue. I have proposed to remove the burden on government regulatory agencies.
Separate HS Codes for Telecom Machinery, Equipment and Software: Lack of separate HS coding system for telecom operators hampers antenna designing and customization solutions for operators. In this case I have recommended a separate HS code.