The budget proposal of raising corporate tax by 5% has frustrated the Association of Mobile Telephone Operators of Bangladesh.
In its monthly publication ‘Connexion’ on Wednesday, AMTOB expressed dissatisfaction over the tax increase, although it didn’t make any immediate reaction following the budget announcement early this month.
The Association, however, is pleased at the reduction of supplementary duty on the import of SIM cards. The duty has been cut to 20% from 30%.
The government has proposed national budget for the fiscal year 2013-14 and will pass it through Parliament on Sunday with changes, if any, after a three-week discussion on it.
When contacted, no AMTOB officials agreed to make any comment on the article expressing dissatisfaction as the Association’s general secretary TIM Nurul Kabir was not in the country.
The article reads: “Proposed budget came as a big frustration for the mobile telecom industry which has already been overburdened with various taxes and tough regulatory framework.”
It says the government plans to raise corporate tax for publicly traded operators to 40% from 35%, while non-listed operators will pay 45%.
“This move will discourage fresh listings of mobile operators through floating of initial public offerings (IPOs) to go listing with the country’s bourses.”
It also fears Grameenphone, the lone listed mobile operator in the country, will be affected by the provision.
According to AMTOB article, given the prevailing scenario of the capital market, many operators would not feel much encouraged to be listed as five such companies out of six are still counting losses. Rather, another two is taking preparations to go for IPO.
“It is an unfortunate move. When we are expecting reduction in taxes, the government has imposed more taxes on it (telecom sector), one of the biggest tax revenue contributors and a huge source of FDI,” said AMTOB.
It also shows China, Malaysia and Vietnam have 25% corporate tax while Thailand has imposed 20%, Ukraine 19%, Singapore 17% and Siberia 15%.
Grameenphone earlier said: “We view this as another attempt to punish the successful and responsible companies. We belong to an industry that is already heavily taxed and this will be an extra burden.”
The operator mentions reduction of supplementary duty on SIM cards is the only incentive for the industry.