Operators propose tax cuts in mobile internet

The Association of Mobile Telecom Operators of Bangladesh (Amtob) has sent a proposal signed by its Secretary-General Brigadier General (retd) SM Farhad to Finance Minister AHM Mustafa Kamal on March 8 proposing a reduction in tax on mobile internet usage in the budget for the fiscal year 2021-22. The organisation has proposed an increase in the value-added tax (VAT) rate to 15% by withdrawing the supplementary duty and surcharge imposed on internet users. At present, a 21.75% tax – 5% VAT, a 15% supplementary duty and a 1% surcharge – is levied on mobile internet. It has called for reducing corporate tax rates and the minimum rate on sales in the telecom sector. The organisation will make a similar proposal at a pre-budget meeting with the National Board of Revenue on Thursday. AMTOB said that in the last few years, the general tax rate has been reduced to 32.5% for non-listed companies and 25% for listed ones; however, the tax rate is still 45% for non-listed telecom companies and 40% for listed ones. "While telecom services were considered essential like other basic needs during the Covid-19 pandemic, they have been compared to luxury or health risk industries while imposing the corporate tax – although telecoms have made significant contributions to Bangladesh's socio-economic development and digital inclusion," Amtob added. At present, telecom companies have to pay a 2% income tax on their annual total sales price. Proposing its withdrawal, the organisation said, "The minimum tax rate is 1% for harmful industries such as cigarettes or tobacco, but 2% is not at all reasonable in important sectors such as mobile telecoms."