The National Board of Revenue (NBR) has halved the value added tax (VAT) on different fees of mobile phone operators, including issuance 4G licences, renewal, royalty, technology neutrality and spectrum.
Bangladesh Telecommunication Regulatory Commission (BTRC) charges the fees and deducts the tax.
The rate of VAT has been cut to 7.5 per cent from existing 15 per cent on the fees, according to an order issued by the revenue board.
The reduced rate will be applicable in case of neutrality fee for 2G and 3G licences.
The VAT policy wing of the NBR issued the special order on Tuesday, making the reduced rate effective from July 1, 2019.
The new VAT law has imposed 15 per cent VAT on the fees.
In the order, signed by first secretary (VAT Policy) Kazi Farid Uddin, the NBR has tagged some conditions with the reduced rate.
The mobile phone companies will not be entitled to the rebate on paid VAT as per the VAT and Supplementary Duty Act - 2012, section 46.
The BTRC will not be able to activate its issued or renewed licences to the mobile phone operators until depositing the deducted VAT to the public exchequer.
As per the special order, the board will be able to scrap the benefit at any time considering the public interest.
Earlier, the NBR estimated that it would get around Tk 10.00 billion in VAT against the 4G licence and spectrum fees by collecting VAT at 15 per cent.
The mobile phone operators have long been opposing the high rate of VAT on the fees and demanding a cut in it.
They were facing problems in getting refund of the paid VAT as the BTRC does not issue VAT chalan in favour of them.
The BTRC cannot issue VAT chalan as it does not have any VAT registration number.
The mobile phone companies have not been paying VAT on some fees and charges on the same ground. There is a legal dispute over this matter.