Call to revise tax on telcos to cut customers' burden
Economic Reporter :
Speakers at a roundtable discussion on Wednesday urged the government to reconsider the proposed duty on telecommunication sector, saying the mobile network operators (MNOs) might collect the cost from customers' pocket to pay off the additional regulatory expense.
They said mobile phone users have already started to witness the outcome of the proposed hike of supplementary duty to 10 percent from 5 percent and it would also increase the cost of digital services.
The roundtable discussion on "Proposed Budget: Reality in Telecom Sector" was organized by the Telecom Reporters' Network Bangladesh (TRNB) in a city hotel.
Mohiuddin Ahmed, President of Bangladesh Mobile Phone Consumer Association (BMPCA), said the government has prioritized the digitization but in the proposed budget for fiscal 2019-20 it has imposed duty on telecom sector which is a key tool for the digitization.
"Already the burden of the supplementary duty has been passed to the customers and we know some other taxes are awaiting the MNOs which also ultimately to be collected from the customers," noted Ahmed.
In the keynote presentation, Shamim Jahangir, finance secretary of TRNB, said after increasing the supplementary duty, government will earn additional Taka 1,300 crore which the MNOs might collect from the customers.
He said the budget also proposed raising the SIM tax to Taka 200 from Taka 100, which will be a hindrance to the growth and increase in minimum tax for mobile companies to 2 percent of their overall turnover from existing 0.75 percent was another blow.
This increasing tax will increase the cost of doing business and ultimately that will hinder offering the quality of service, added Shamim.
Mahtab Uddin Ahmed, managing director and chief executive officer of Robi, said they have logged profit in the first quarter but the proposed tax measures would not allow it to continue the trend.
Robi CEO said only one operator in the market is profitable while three others are blooding that is why the policy makers need to look into the matter of additional taxes.
He said government had tried to offer new mobile licenses at least three times but found no response though as a market Bangladesh is very lucrative due to huge digital centric youth generation, but only challenge is tax policy and regulation.
TIM Nurul Kabir, an independent analyst of telecom and digital service, said this budget goes against the foreign investment protection act.
"Policy market, especially NBR needs to look into the matter why foreign companies leaving Bangladesh and we think we have a serious problem on financial regulation," said Kabir, also a former secretary general of the Association of Mobile Telecom Operators of Bangladesh.
Meftha Uddin Khan, Member (Tax Survey and Inspection) of National Board of Revenue, said this year they are getting huge reaction from different levels especially from the digital segment.
Echoing with Khan, Md Saiful Islam, additional secretary of posts and telecommunications division said they have already got feedback from different stakes and placed that feedback to the finance division.
Hossain Sadat, director and head of regulatory affairs at Grameenphone, Sarwar Hossain Khan, head of Tax at Banglalink and Md Saifur Rahman from Teletalk also spoke at the occasion.
With TRNB President Muzib Masud in the chair, former TRNB President Mohammad Zahidul Islam Sajal conducted the roundtable. TRNB General Secretary Md Mazharul Anwar Khan gave welcome speech.