Bangladesh Telecommunications Company Limited-BTCL, the state-owned telecom service provider has applied to the National Board of Revenue (NBR) demanding withdrawal of income tax at source at the rate of 10 percent at the local market level.
In this application letter issued by the finance department of BTCL, several arguments have been highlighted in favor of tax exemption including data to prevent duplication on the Internet. It is said that BTCL is unable to show the invoice of tax paid at the import stage in the income tax return despite paying double tax online.
The letter said that BTCL is continuously working for the development of Smart Bangladesh. Despite not being commercially profitable, BTCL has been providing data internet and telecom services at low cost in the national interest in the information and technology development sector of the country, especially at the union level including hill towns and remote areas. Bandwidth services are purchased in foreign currency from various foreign operators to provide data internet services. BTCL has to pay tax at source at the rate of 10 percent on such payment. Foreign operators pay applicable income tax and taxes in light of their respective domestic regulations for supply of bandwidth. BTCL may be exempted from deducting income tax at source at the current rate of 10 per cent if foreign companies providing services provide their country tax payment certificate to BTCL.
Besides, the letter also stated that the service providers will not agree to provide services if income tax is deducted at source from the foreign operators due to BTCL. It is mentioned in this letter that, BTCL is facing financial loss if income tax is leviable on the bandwidth provider as it is paid from BTCL. BTCL is deducting income tax at source at the rate of 10 per cent on payment of bandwidth in foreign currency, but while selling the same bandwidth to various ISP/IIG operators in the local market, it is paying the bill by deducting income tax at source at the rate of 10 per cent from the invoices issued to them. In this case, if income tax is deducted at the rate of 10 percent at the import level and 10 percent at the local market for the same service, double taxation is being imposed. BTCL has been exempted from paying tax on payments made in foreign currency against the same service. Moreover, the imposition of such double taxation would increase the cost of the allocated bandwidth to a large extent.
BTCL said that several letters have been sent in this regard earlier. But it didn’t work. So again, the organization has sought exemption from income tax against the service price in the interest of providing services at low cost at the customer level.
