Taxation for the mobile sector should be rationalised to support the cause of building digital Bangladesh, mobile phone operators said.
They said this in an immediate reaction to the proposed budget recently, adding that the sector is already heavily taxed and in dire need of tax reduction in some areas, including minimum tax, corporate tax, SIM tax and duty on direct operator billing.
Association of Mobile Telecom Operators of Bangladesh (AMTOB) President Mahtab Uddin Ahmed said, “Unfortunately, none of our well-reasoned passionate pleas for the telecom sector have been reflected in the proposed budget. Therefore the industry will continue to struggle in the coming year resulting in slower digitalisation drive at a time when we needed to accelerate it."
AMTOB Secretary General Brig Gen SM Farhad (Retd) said that it is important to reconcile the contribution of the mobile telecommunications sector with the overall economy and the existing tax system.
Moreover, while we are working for bringing the latest technology and are keen to invest further, the current regime will impede the growth of Digital Bangladesh and discourage FDI. We hope that the Government will reconsider our proposals and will reform the proposed budget accordingly, he added.
The mobile sector has demanded to withdraw the minimum 2 per cent turnover tax imposed on the unprofitable carriers, to rationalise the current high corporate tax rate and reduce to a tolerable level on non-listed and listed operators to 32.5 per cent and 25 per cent from current 40 per cent for listed and 45 per cent for non-listed, said a press release.
They also demanded to withdraw the supplementary duty, surcharge from direct operator billing, provide amortisation facilities on all intangible assets, abolish the tax of Tk 200 imposed on mobile SIM, provide clear guidelines for VAT exemption for government agencies and rationalise interest on unpaid VAT.
They called on to reduce to a reasonable level the existing 33.25 per cent and 21.75 per cent VAT, SD, and surcharge over Tk 100 talk time and internet usage.
The sector also has in many ways appealed to the government to rationalise the existing high tax system, including earlier recommendations to the National Board of Revenue, but it has not been considered.
The mobile phone sector has been declared as an emergency sector during COVID-19 and contributing significantly in terms of connecting people to run businesses as well as the economy.