The Association of Mobile Telecom Operators of Bangladesh (AMTOB), a platform representing all telecom operators in the country, presented 16 proposals including a reduction of the corporate tax rate on mobile phone operating companies in the next budget.
"We propose to remove or reduce the minimum tax. Mobile operators are required to pay a minimum tax of 2 Per cent of their annual gross revenue which is in conflict with the Income Tax Act. Paying minimum tax despite loss in business means paying tax out of capital which is a barrier to business expansion," AMTOB Secretary General Brig Gen (retd) SM Farhad said during the pre-budget discussion meeting with the National Board of Revenue (NBR) on Sunday.
AMTOB also proposed to withdraw the minimum turnover tax and abolish the tax of Tk 200 imposed on SIM cards.
"There is no alternative to removing or reducing the minimum tax in favour of sustaining the industry and building Digital Bangladesh, as announced by the government," he added.
"The high rate of corporate tax should be reduced. The general corporate tax rate in the country is 27.5% for unlisted companies and 20 per cent to 22.5 per cent for listed companies. However, despite being an essential service, Bangladesh's mobile sector has to pay a high rate of corporate tax. The tax rate is 40% for listed mobile operators and 45% for unlisted companies," he added.
"In terms of taxation, instead of classifying mobile operators as a separate category, we demand that they be reorganised in line with other companies and that the tax be reduced at that rate," he further said.
The AMTOB Secretary General also said that the mobile phone sector is one of the sectors that provide the most revenue to the government in Bangladesh.
"We need to remember that the top three operators in the mobile sector are all foreign investors and their contribution to the socioeconomic development of the country is immense,” he said.
He said also that from the main source of people's telecommunication and internet access to banking, mobile money, ride sharing, e-commerce, education, or e-courier, all sectors are directly or indirectly dependent on mobile.
“As the growth of mobile service providers increases, customers will get better quality services and the government will get more revenue," he added.
"Even then it is seen that the government is imposing new taxes every year in this sector. If the growth of the mobile sector is not encouraged by rationally considering the taxation system of the mobile sector, it will have an impact on all other sectors," SM Fahad added.
Besides, there is no clear guideline for VAT removal for Govt. regulatory organisations as per new VAT & SD ACT 2012. Government agencies and regulators are not following VAT- control proportionately.
“For this reason, operators are ultimately suffering. There needs a clear guideline for solving this problem,” he said.
He said that there is no separate HS coding system for telecom machinery, equipment and software, and the organisations have to import under different HS codes.
“HS coding systems are currently hampering telecom operators' antenna designing and customisation solutions. This complicates unreasonable tax assessments and VAT rebates,” he added.
