NBR yet to decide on tax benefit to GP

---

FE Report
The National Board of Revenue (NBR) is yet to take any firm decision regarding the tax benefit of the country's largest cell phone operator Grameenphone (GP) that intends to offload shares through initial public offerings (IPOs), said its chairman Muhammad Abdul Mazid.
"We are waiting for the finance adviser's opinion regarding the GP proposal to offload 50 per cent of the IPOs to public and put the rest 50 per cent under pre-IPO placement," Mr Mazid said.
As per NBR rule, a company will be entitled to 10 per cent corporate tax exemption if it sells 10 per cent of its total share through IPOs.
Mr Mazid said: "NBR will able to give a final decision regarding tax benefit to the GP on share offloading after getting his opinion."
The finance adviser is now away on a foreign tour, he said.
Banks, insurance, financial institutions and mobile phone operators are currently paying corporate tax at a rate of 45 per cent. The rate has not been revised in the budget for fiscal 2008-09 despite strong pleas from the market players in these sectors.

However, the GP initially decided to offload shares worth $300 million. But it might halve the size if the government remains firm on its decision regarding tax benefit.
The GP has, therefore, moved to reduce its IPO size to $150 million including pre-IPO placement from the proposed $ 300 million.
In June last, the GP has filed its IPO application with the Securities and Exchange Commission (SEC) showing the value of the company at $3.0 billion.
In 2007-08, the GP was the highest corporate tax payer. The GP paid Tk 4.35 billion tax in the last year, which was Tk 1.28 billion in the previous year.
On payment of Value Added Tax (VAT), the GP has paid Tk 14.38 billion last year, which is the second highest amount of the corporate VAT payers.
Presently, there are six mobile phone companies operating in Bangladesh -- Grameenphone, AKTEL, Banglalink, CityCell, Warid and state-run Teletalk.
Sources said country's capital market would get a big boost if mobile phone companies are listed with the stock exchanges.