Cell phone operators are exempted from giving 15% VAT on their revenue sharing with the BTRC through a Statutory Regulatory Order (SRO) issued by the tax regulator on Monday.
The National Board of Revenue (NBR) in this SRO said, under the VAT law, mobile companies had to give a VAT when they shared 5.5% revenue with the telecom regulator, although they pay 15% VAT on their total earnings.
As per the conditions of 2G licence, the operators give 5.5% of their total revenues to the BTRC in the form of revenue sharing.
The VAT law requires a 15% tax on any amount received by a government or semi-government entity for issuing a licence or permission or condition.
Given the situation, the authority has decided to exempt the operators in this particular revenue sharing issue, the SRO said. Secretary General of the Association of Mobile Telecom Operators of Bangladesh (AMTOB) TIM Nurul Kabir said the initiative was somewhat relieving for the telecom sector, which is burdened with many different kinds of taxes.
He expressed his hope that the authority will soon address the issue of VAT on 3G spectrum charge.
Mobile operators held a series of meetings with the NBR over this VAT issue. In these meetings, they raised five concerns.
After the meetings, NBR formed a committee to review the SIM replacement tax and announced that it was considering cutting the VAT on 3G spectrum charge to 2.5% from the existing 7.5%.
The auction for 3G spectrum is scheduled to be held on September 8. BTRC, which wants all private operators to participate, has been pushing back the date for the auction. However, the operators have had a strict stance from the beginning, saying they will go for the 3G auction only after all tax-related disputes and court cases are resolved.
