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Amtob calls for revision of supplementary duty in mobile services

  • Published at 12:05 pm June 17th, 2020
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Amtob president also alleged that the proposed budget doesn’t even attempt to address the long standing issues with the investment climate engineered by the taxation

The Association of Mobile Telecom Operators of Bangladesh (Amtob) has called upon the government for revision of supplementary duty (SD) on mobile services in the proposed budget and reform of telecom tax policy.

The association came up with the call on Tuesday during an online briefing on the impact of the proposed budget on the Mobile Telecom Sector.

The speakers placed demands to reconsider some specific points for the sake of realizing a Digital Bangladesh, reports UNB.

Amtob Secretary General Brig Gen (Retd) SM Farhad along with the high officials of the mobile operators were present at the session, including Banglalink Chief Corporate and   Regulatory Affairs Officer Taimur Rahman, Robi Axiata Chief Corporate and Regulatory Officer Shahed Alam, and Grameenphone Head of Public and Regulatory Affairs Hossain Sadat.

Amtob President Mahtab Uddin Ahmed said it is a matter of sorrow that the telecom taxation has once again moved further away from the spirit of Digital Bangladesh vision in the proposed budget for 2020-21.

“When we are frantically trying to close the digital divide, we see SD being raised yet again taking access to mobile connectivity beyond the reach of people with limited purchasing power. This very much flies in the face of the glorious vision of Digital Bangladesh,” he added.

The Amtob president also alleged that the proposed budget doesn’t even attempt to address the long standing issues with the investment climate engineered by taxation.

Drawing attention to the economic contribution of the telecom sector, Mahtab said the industry currently contributes 7% of the GDP which could easily hit double digital figures provided we fully appreciate the impact this industry can have on the economy.

“We can always explore innovative ways to increase revenue contribution from this industry to the government exchequer without burdening the customers and our shareholders; we are happy to collaborate with the government to strike that winning formula,” he added.

Amtob also pleaded the government to reconsider the following points for the sake of realizing Digital Bangladesh:

Additional SD on mobile services

With the imposition of an additional 5% SD on the mobile services, Amtob believes that not only will that increase the cost of services for the customers, but also contradict the digital vision of the government to ensure affordable digital services for all.

50% payment before VAT appeal

The Amtob said the requirement to make 50% upfront payment even before telecom operators could file for appeal against the VAT claims would potentially empower the authority concerned to make claims arbitrarily.

This creates the backdrop of denial of justice that will only further tarnish the country’s image in the global market, the association said.

Minimum tax rate

The association also highlighted that the sector-specific taxes proposed lacked sound rationale.

While mobile connectivity provides demonstrable socio-economic benefits, the rate of minimum tax faced by mobile operators is double that of an industry with well-established adverse consequences, Amtob said.

At the same time, this type of taxation imposes an asymmetric burden on operators that are struggling to make a profit, thereby reducing competitive forces in the market, creating a barrier to business expansion and to attracting foreign investment, they added.

Corporate Tax rate remains unchanged

They also noted that the corporate income tax rate for listed mobile operators is 40% while for non-listed mobile operators 45% of their profit.

The latter is the highest level imposed in Bangladesh, at par with the rate for the tobacco industry, and significantly higher than the general corporate tax rate for non-publicly traded and publicly traded companies, they said.

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