Telecos demand VAT lifting on internet use

Staff Correspondent

24 April, 2019 12:00 AM printer

Telecom operators demanded the government to withdraw Value Added Tax (VAT) and other fees on internet usage in the next budget to boost country’s telecommunication sector.

They also demanded for elimination of SIM tax on both new connection and SIM replacement.

 Association of Mobile Telecom Operators of Bangladesh (AMTOB) made the demands at a pre-budget discussion with National Board of Revenue held at the NBR headquarters in the city on Sunday.

AMTOB  also urges  imposition of 10 percent of total disputed VAT as appeal fee only once instead of current provision of payment of 10 percent of disputed amount as appeal fee at every stage of appeal process.

It is not rational to pay 30 percent of disputed VAT as fee for filing appeal at three forums – commissioner (appeal), appellate tribunal and High Court, they observed.

The association said a subscriber is now required to pay Tk 100 in total for new SIM connection or replacement of old SIM and RUIM.

NBR should withdraw the tax on SIMs and RUIMs connection and replacement and on the upcoming virtual SIMs to facilitate more people to get SIM cards at cheaper cost, it suggested.

The waiver would also increase mobile penetration in the country, it added.

Telecom operators also demanded clear guidelines on VAT registration of government agencies and regulatory bodies for VATable services as the service receivers would be deprived of taking input tax credit in absence of VAT registration of the service providing agencies.

They sought withdrawal of VAT, supplementary duty and surcharge which now stand at 11.25 per cent in total on mobile internet usage. Exemption of VAT on internet would make it affordable to mass people, they claimed. AMTOB also demanded amortisation facility for all intangible assets as mobile operators now need to use so many intangible assets due to development of information technology.

It also sought elimination of minimum tax at the rate of 0.75 per cent for the sector saying that the provision of minimum tax was against the spirit of income tax as tax was payable on income, not on revenue.

The association also said that NBR should scrap the bank account freezing power by assistant commissioners and VAT officials above the rank. It demanded that the revenue board empower only commissioners for the job. Existing provision empowering assistant commissioners and officials above the rank creates a potential threat of misuse of power creating extra hassle for taxpayers, it claimed. Robi regulatory affairs head Shahed Alam placed the AMTOB’s budget proposals at the meeting presided over by NBR chairman Md Mosharraf Hossain Bhuiyan.

Robi chief executive officer Mahtab Uddin Ahmed, acting Banglalink CEO and chief technology officer Pierre Boutros Obeid, Banglalink chief corporate and regulatory affairs officer Taimur Rahman, Grameenphone deputy chief financial officer Mustafa Alim Aolad, Teletalk deputy general manager Md Saifur Rahman Khan and AMTOB secretary general SM Farhad were present, among others, at the meeting.