Tax cuts to boost revenue from telecom: AMTOB

Special Correspondent

9 June, 2021 12:00 AM printer

Tax cuts to boost revenue from telecom: AMTOB

Mobile network operators have demanded to cut minimum turnover, corporate and SIM taxes, supplementary duty (SD) and surcharge (SC) on digital services.

Association of Mobile Telecom Operators of Bangladesh (AMTOB) said the adjustment of tariff and duties will help to raise the government’s revenue collection additional of Tk 30 billion within four years in 2025.

It also proposed to conduct a survey by the National Board of Revenue (NBR) and the Posts and Telecommunications Division in this regard.

The mobile telecom revenue was Tk 266 billion in 2020, said AMTOB secretary general Brig Gen (Retd) SM Farhad at a virtual post-budget press briefing.

Mobile network operators have shared Tk 150 billion from its income, he added.

“The government’s revenue will be increased by Tk 30 billion within 2025 subject to changes in minimum turnover tax corporate and SIM taxes, SD and SC,” Farhad said.

“Despite the expansion of mobile coverage, about half of Bangladesh’s population (46% unique-subscriber penetration) remains unconnected to the mobile network. Reforming mobile taxation is key to accelerating digital inclusion,” said S M Farhad.

According to International Telecommunication Union (ITU), 10 percent increase in mobile broadband penetration would yield 2.43 percent increase in GDP per capita in the developing countries.

AMTOB demanded to withdraw the minimum 2 percent turnover tax imposed on the unprofitable carriers.

It also demanded to reduce corporate tax to general rate between 22.5 percent and 30 percent.

AMTOB also requested to withdraw the supplementary duty and surcharge from direct operator billing as well as to abolish tax of Tk 200 imposed on mobile SIM card.

Shahed Alam, chief corporate and regulatory officer at Robi said, “Despite making our demands based on thorough analysis, we, as an industry, are continuing to get deprived from the budget every year.”

“We would urge the government to undertake a comprehensive study on the taxation structure for the industry, so that we can have a healthy dialogue and arrive at decisions that will truly unlock the digital potential of the country.”

Taimur Rahman, chief corporate and regulatory affairs officer, Banglalink said, "We are disappointed to see that our reasonable demand for a few revisions has not been addressed in the announced budget. It would have been beneficial to mobile phone subscribers if some of our requests had been taken into consideration.”

“If these tax rates are reduced significantly, our investors will feel more encouraged to invest in this telecom market, which is a good sign for the Foreign Direct Investment (FDI), he said. Rahman said they are still hopeful that the authorities will make a taxation regime which is conducive to providing quality digital services to customers at affordable prices.

Hossain Sadat, director and head of public and regulatory affairs at Grameenphone said, “The telecom sector has been declared as an emergency sector during the COVID-19 pandemic and contributing significantly in terms of connecting people to what matters most.”

“We believe, rationalizing the taxation systems will accelerate the digital journey as well as will help us to contribute more towards the national exchequer,” he added.