Review proposed telecom budget: AMTOB

Special Correspondent

19th June, 2019 01:38:14 printer

The Association of Mobile Telecommunication Operators of Bangladesh (AMTOB) called upon the government to review the budget proposal on the telecom sector, as it runs counter to the concept of Digital Bangladesh.

The changes of supplementary duty on services provided through mobile phone SIM/RIM card were raised from 5 percent to 10 percent and SIM tax from Tk 100 to Tk 200.

As a result, the Robi has already started incurring a loss, Robi Chief Executive Officer Mahtab Uddin Ahmed told a press conference at a local hotel on Tuesday.

AMTOB secretary general Brig Gen (retd) SM Farhad said the telecom operators will require to pay additional Tk 1300 crore for supplementary duty.

He added that another Tk 300 crore to be paid for corporate tax due to minimum tax for mobile companies which was raised from 0.75 percent to 2 percent of turnover.

The import duty on smart phones increased from 10 percent to 25 percent, he said.

It was observed that the new tax policy would burden existing and new customers with additional costs.  Earlier, the industry had proposed that the National Board of Revenue (NBR) should eliminate the existing 5 percent SD on mobile services and SIM tax. Further, the NBR was requested to reduce the minimum corporate tax for non-profitable operators and slash the corporate tax for listed and non-listed companies by 5 percent. AMTOB had also requested the NBR to reduce the appeal charge on any financial disputes from the current 30 percent to 10 percent.

In this backdrop, imposition of minimum tax of 0.75 percent on turnover meant that three investors were forced to pay 0.75 percent of their revenue, even though they were making a loss.

Furthermore, imposition of 15 percent tax on retained earnings has wide implications on publically listed MNCs and local conglomerates. The new tax will compel companies to pay out higher dividends to keep their reserves at minimum, thus reducing funds for future investment. Tax on retained earnings is double taxation, as listed companies already pay up to 42.5 percent corporate tax and the new law would be an additional 15% tax on its year end reserves.

“We are utterly disappointed to note that the proposed national budget has undermined the significant contribution made by the telecom industry in implementing the vision of Digital Bangladesh. Telecom industry contributes more than 6.2 percent in the gross domestic product (GDP) but there is no reflection of this fact in the proposed budget. It is widely recognized that the sector in Bangladesh is loaded with the highest tax burden in the world,” said the AMTOB Secretary General.