Telecom operators have urged the government to reconsider taxes on telcos in the proposed national budget for fiscal year 2021-22 year and rationalise the existing tax structure on the operators to help them contribute more to building 'Digital Bangladesh'.
In an immediate reaction to the proposed budget placed at the national parliament on Thursday, Association of Mobile Telecom Operators of Bangladesh (AMTOB) said taxation for the mobile sector should be rationalised to support the cause of building Digital Bangladesh.
The telecom operators said the sector was 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, according to a statement released on Thursday night.
The sector 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 the appeal has not been taken into consideration, the statement said.
The mobile phone sector has been declared as an emergency sector during the Covid-19 - the sector has been contributing significantly in terms of connecting people to run businesses as well as the economy.
The sector also aims to connect the remaining unconnected people who belong to the bottom part of the pyramid.
Therefore, the operators urged the government to reconsider their proposal in some important areas and address those in order to continue support to the digital society.
Operators said issues, including minimum tax, corporate tax, SIM tax, and direct operator billing, should be addressed in this budget - the due attention will help accelerate connecting more people to the digital journey.
According to the proposed national budget, the government has kept mobile telecom-related tax rates unchanged.
The mobile sector has been appealing for a reform in applicable tax policies for the last few years, but it has been ignored every year, much to the frustration of the people involved in this sector.
AMTOB urged the government to withdraw or rationalise the minimum 2 per cent turnover tax imposed on the unprofitable carriers.
The operators demanded a reduction in corporate tax on unlisted and listed operators to 32.5 per cent and 25 per cent, respectively, from the existing rate of 45 per cent and 40 per cent.
AMTOB demanded that the government withdraw the supplementary duty and surcharge from direct operator billing and provide amortization facilities on all intangible assets
It also demanded that the government abolish the tax of Tk 200 imposed on mobile SIM.
The operators urged the government to reduce to a reasonable level the existing 33.25 per cent and 21.75 per cent VAT, SD, and surcharge over Tk100 talk time and internet usage, respectively.
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, "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," he further said.
"We hope that the Government will reconsider our proposals and will reform the proposed budget accordingly."
