Row between NBR, cell phone operators remains unresolved

The row between taxmen and cell phone operators over payment of SIM replacement tax still remains unresolved as both the parties are yet to reach a consensus on the issue even after three months of negotiation, sources said.

Taxmen wrapped up the negotiation process recently by preparing a final report that the representatives of mobile phone operators have found not acceptable.

The Value Added Tax (VAT) wing under the National Board of Revenue (NBR) recently submitted the final report to the board without reaching any agreement with of the cell phone companies.

For preparing a report through consensus, the NBR had formed a committee to review its demand for Tk 31 billion as SIM replacement tax for 2007to 2011 period following an instruction from the High Court (HC).

The committee is scheduled to submit a report to the HC after settling the dispute over NBR demand by this month.

The NBR officials have apparently given up their efforts to realise its claimed SIM replacement tax from cellphone operators.

Unresolved dispute over payment of SIM replacement tax has put the VAT wing in a quite uncomfortable position.

Also, Chief Executive Officers (CEOs) of the four telecom operators recently expressed their concern over the demand for SIM replacement tax.

In a joint letter to Finance Minister AMA Muhith, the mobile operators alleged that their suggestions remained ignored in the final report. They sought FM's intervention in resolving the matter.

NBR officials, however, said that the cell phone operators failed to submit satisfactory documents to the VAT wing in favour of their claim.

In the letter, telecom operators said they are unable to provide documents of SIM replacement before 2010 as there was no regulatory guidelines from BTRC for preserving the documents of SIM replacement.

The disputes could not be resolved after three month-long discussion with the cell phone operators.

After thorough scrutiny, the revenue board could reduce the amount by Tk 520 million.

The Large Taxpayers Unit (LTU) under VAT wing recently explained the findings of the review committee to the NBR.

"We are waiting for NBR's instruction over the unresolved issue," said a senior VAT official.

The VAT wing will also inform the HC about the matter, he added.

The final report was scheduled to be submitted to the HC by November 7 last. The time has been extended by three more months following request of the VAT wing.

Officials said the NBR claimed the dues worth Tk 30. 62 billion in 2012 from four cell phone companies against replacement of SIM card but the companies declined to comply with it.

The mobile phone operators filed a case in the court claiming that they only replaced existing SIMs and did not sell new ones.

Following the disputes, the HC instructed both the NBR and the cellphone operators to settle the issue through discussion.

Representatives of cell phone operators, Bangladesh Telecom Regulatory Commission (BTRC), Association of Mobile Telephone Operators of Bangladesh (AMTOB) are also on the committee.

As per taxmen's estimate, the Grameenphone owes Tk 15.80 billion while Banglalink 7.74 billion, Airtel Tk 820 million and Robi Tk 6.64 billion to the government.

Tax officials said they have identified the cell phone operators who sold SIM cards to new subscribers from 2007 to 2011.

However, cell phone companies declined to accept NBR's claim. They said the companies just replaced lost or broken SIM cards to the existing subscribers, not did not sell new ones.

From July 2007 to 2011, the NBR claimed replacement of 13.4 million SIM cards by Grameenphone.

Tax officials said Airtel has replaced 5,55,217 SIM from February 2009 to July 2009. Banglalink replaced 72 million SIM from June 2009 to December 2011.

Robi replaced 5.2 million SIM from March 2007 to December 2011.