Pay Tk 4.44b VAT to get the go for merger

Government's tax authority has asked Airtel to clear its outstanding dues in Value Added Tax (VAT) worth Tk 4.44 billion to get the go for its planned merger with another mobile-phone multinational, Robi.   
Officials said Robi and Airtel will have to pay the tax arrear before merging their operations.
The Large Taxpayers Unit (LTU) under the VAT wing recently sent a letter to the Airtel management for clearing the dues to the wing prior to merger.
According to the VAT law 1991, any company needs to clear its arrears for obtaining permission of merger from the National Board of Revenue (NBR).
Officials said either Airtel or Robi has to pay the money or give unconditional bank guarantee on the amount to obtain permission to turn into a combined entity.
To discuss the issue, the revenue board Sunday held a meeting with the representatives of the two mobile-phone operators at the NBR office.
The VAT law says: 'No  registered  person  shall  transfer  any  movable  or immovable property under his business enterprise or the ownership of his business until he makes full payment of all Value Added Tax or, where applicable, Value Added Tax and Supplementary Duty payable under this Act: Provided that when the buyer of movable or immovable property or ownership submits unconstitutional bank guarantee of any scheduled bank relating to the payment of Value Added Tax or Value Added Tax and Supplementary Duty or other dues, as the case may be, payable, the concerned Commissioner upon proper consideration and on terms set by him, can issue order for the transfer'.
Earlier, Robi and Airtel had formally applied for permission from the telecom regulator to merge their operations.
The mobile operators submitted a joint application to the Bangladesh Telecommunications Regulatory Commission (BTRC).
Robi and Airtel will have to obtain approval from the government's relevant wings to turn into a combined entity.
Robi will have 75 percent stake in the merged entity and Airtel 25 percent, according to the joint application.
Of Robi's 75 percent stake, 70 percent will be owned by Axiata Group, Robi's Malaysia-based parent company, and 5.0 per cent by Japan's NTT DOCOMO.
At present, Axiata Group's share in Robi is 91.59 percent and NTT DOCOMO's 8.41 percent.
After merger, the combined entity will have the second- largest subscriber base in Bangladesh after Grameenphone.
Robi entered Bangladesh in 1997 under the brand name AKtel while Airtel started operations in 2010 by acquiring 70 per cent stake in Warid Telecom. Later, Airtel picked up the rest 30 percent stake.
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