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VAT settlement of telcos faces uncertainty

  • Published at 09:52 pm July 11th, 2019
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NBR, BTRC stances lack clarity

The telecom regulator’s refusal to accept revenue sharing fees from the mobile phone operators has created uncertainty over VAT settlement.

Industry insiders and government officials said the long-standing issue of settlement of value-added tax (VAT) for mobile phone companies became a deadlock after the Bangladesh Telecommunication Regulatory Commission (BTRC) refused to take the payment on Wednesday.

Wednesday was the last day for the payment for April-June period, for the fees that amount to around Tk1,000 crore, including revenue sharing fees, social obligation fund, annual spectrum fees, etc.

Officials at Grameenphone, Robi Axiata and Banglalink said they made their best efforts on the last payment day, but could not succeed.

“We cannot accept the fees as the operators refused to pay VAT as per the existing law,” BTRC Chairman MD Jahurul Haque told Dhaka Tribune yesterday.

He further said the commission asked the telcos to bring clearance certificates from the National Board of Revenue (NBR) stating they had no problem if the BTRC accepted payment without VAT.

“We cannot take responsibility for such a matter as the NBR is the concerned authority in this case. The operators have to pay late fees for the delay, though,” he added. 

However, the Association of Mobile Telecom Operators of Bangladesh (Amtob), in a statement on Wednesday, said as the BTRC did not have any VAT registration, the operators were not allowed to pay the VAT amount to the telecom regulator.

According to the Value-Added Tax and Supplementary Duty Act, 2012, all service suppliers must have VAT registration, which includes the BTRC. The VAT rate is 15%.

Earlier, Amtob in a letter to the NBR on June 26 requested the revenue authorities to find out a solution to the issue in consultation with the BTRC. 

“We are in the middle of two regulators,” a senior official of a mobile company said, requesting anonymity.

He further said the mobile companies had no problem with paying the VAT.

“We have been seeking clear direction from both the BTRC and NBR, but they have yet to offer any solution. It is frustrating,” he added.

BTRC officials in September last yearsaid the commission had also sought suggestion from the NBR on this issue, but receivedno response.

“It seems the NBR does not want to give any rebate to the mobile operators as the VAT certificates will make the operators eligible for rebate,” a senior BTRC official said.

Asked about the matter, NBR officials refused to make any comment.

In 2017-18 fiscal year, the BTRC earned Tk2,501.5 crore from the mobile phone operators in revenue sharing, spectrum charges and licence fees, and Tk2,648.9 crore in the previous fiscal year.