In view of the all-encompassing role played by the telecom industry in the country’s socio-economic development, it was very sad to note that none of the industry’s recommendations have been addressed in the proposed budget. Speaking at the virtual post-budget press briefing today, AMTOB leaders made these remarks. They urged the government to reconsider the recommendations of the industry.
Elaborating on the predicaments faced by the telecom industry, AMTOB Secretary General Brig Gen S M Farhad (Retd.) highlighted that while mobile market revenue accounted for 1.1% of the country’s GDP in 2019, the sector’s tax and fee payments accounted for around 4.4% of total government tax revenue. This means that the mobile tax contribution is 4.2 times its size in the economy.
Brig Gen S M Farhad (Retd.) said, “Despite the expansion of mobile coverage, about half of Bangladesh’s population (46% unique-subscriber penetration) remains unconnected to the mobile network. Reforming mobile taxation is therefore key to accelerating digital inclusion. According to International Telecommunication Union (ITU), 10% increase in mobile broadband penetration would yield 2.43% increase in GDP per capita in the developing countries. Therefore, the Government can easily catalyze GDP growth by lowering the taxation structure.”
Following are some of the issues that the mobile sector has been demanding:
-
-Withdrawal or rationalization of the minimum 2% turnover tax imposed on the unprofitable carriers
-
-Rationalise the current high corporate tax rate and reduce to a tolerable level on non-listed and listed operators to 32.5% and 25%, respectively (current 40% for listed and 45% for non-listed).
-
-Withdraw the supplementary duty and surcharge from Direct Operator billing
-
-Provide amortization facilities on all intangible assets
-
-Abolish the tax of BDT 200 imposed on mobile SIM
-
-Reduce to a reasonable level the existing 33.25% and 21.75% VAT, SD, and surcharge over BDT 100 talk time and internet usage, respectively
-
-Provide clear guidelines for VAT exemption for government agencies and rationalize interest on unpaid VAT
Speaking at press meet Taimur Rahman, Chief Corporate & Regulatory Affairs Officer, Banglalink said, “We are disappointed to see that our reasonable demand for a few revisions has not been addressed in the announced budget. It would have been beneficial to mobile phone subscribers if some of our requests had been taken into consideration. If these tax rates are reduced significantly, our investors will feel more encouraged to invest in this telecom market, which is a good sign from the FDI perspective as well. We are still hopeful that the authorities will make a taxation regime which is conducive to providing quality digital services to customers at affordable prices.”
Hossain Sadat, Director and Head of Public & Regulatory Affairs, Grameenphone said, “The telecom sector has been declared as an emergency sector during COVID-19 and contributing significantly in terms of connecting people to what matters most. Besides, we are being considered as an important vehicle to speed up the digitization journey. We are continuously expanding our footprint and connecting the unconnected citizen. We believe, rationalizing the taxation systems will accelerate the digital journey as well as will help us to contribute more towards the national exchequer.”
Shahed Alam, Chief Corporate and Regulatory Officer, Robi said, “Despite making our demands based on thorough analysis, we, as an industry, are continuing to get deprived from the budget every year. In this backdrop, we would urge the Government to undertake a comprehensive study on the taxation structure for the industry, so that we can have a healthy dialogue and arrive at decisions that will truly unlock the Digital potential of the country.”