The government is likely to backtrack from imposing taxes on the income of Bangladesh Telecommunications Regulatory Commission (BTRC) as Prime Minister's Office (PMO) authorities found the fiscal measure as paradoxical.
Prime Minister's Economic Adviser, Dr Mashiur Rahman, in a letter, termed 'unusual' the tax measure taxing government's income earned from the lease of spectrum.
He passed the buck to Principal Secretary of the PMO Abul Kalam Azad, for settling the issue in consultation with the chiefs of the National Board of Revenue (NBR) and the BTRC, official sources said.
"Spectrum or frequency is the monopoly asset of the government. The government earns by leasing the asset. Imposition of income tax on such government income is an 'unusual concept'," Dr Rahman wrote in the letter.
The matter should have been resolved in 2012 when the government held meeting to settle the issue, he wrote.
Officials said the tax authority asked the BTRC to pay tax following the Finance Bill-2014 that imposed tax on local authorities at a cut rate of 25 per cent.
A senior tax official said the NBR estimates some Tk 30 billion in taxes in the current fiscal year (FY) from BTRC income.
"It is the government's decision whether tax will be imposed on BTRC or not. The tax authority may have to amend the income-tax provision if the government high-ups instruct them to exempt BTRC from payment of income tax," he said.
The NBR, for a second time, sent a summary to the Finance Minister last month explaining the situation stemming from a persisting row with the BTRC over payment of tax.
Officials said the tax authority did not yet get any instructions from the finance minister about the tug-of-war over taxing the government income.
In the current 2014-15 budget, the NBR included a new provision codenamed 52V to impose 10 per cent tax at source on spectrum-assignment fees, licence-acquisition fees, application fees, annual licence fees, licence-renewal fees, revenue sharing, social obligation fund or other fees or charges payable to the BTRC.
The provision stipulates that telecom operators will have to deduct the tax at the time of payment to the BTRC. The paid advance tax would be adjusted with the actual payable income tax of the BTRC in its tax return.
Tax officials said the new provision might have to be scrapped from the income-tax law as PMO high-ups expressed reservation on the taxing of the BTRC.
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