Telecom operators seek amendment to sector's income tax provisions

Country's telecom operators have proposed that the revenue board amend income-tax provisions to relieve them of double taxation, which is contradictory to the main policy of the income-tax law.
They said it is not possible to collect the Proof of Submission of Tax Return (PSR) from many entities, even regulatory bodies, under the present context of Bangladesh.
Representatives from the Association of Mobile Telecom Operators of Bangladesh (AMTOB) met with the National Board of Revenue (NBR) at a pre-budget meeting in the city on Tuesday.
According to the Income Tax Act, if any supplier/ service provider fails to submit the PSR, the taxpayer responsible for the payment is obligated to deduct tax at a 50-percent higher rate.
Shahed Alam, Chief Corporate and Regulatory Officer at Robi Axiata Limited, said the telecom operators were facing a high tax burden as it is not possible for them to collect PSR from the tax-exempted entities like the Bangladesh Telecom Regulatory Commission (BTRC) and Bangladesh Railway.
Also, the Institute of Chartered Accountants of Bangladesh (ICAB), the Institute of Chartered Secretaries of Bangladesh, and the Chartered Institute of Management Accountants (CIMA) cannot furnish PSR, he added.
"We have some 16,000 mobile towers across the country. It's not possible to collect PSR from each of the land owners too," he added.
During the meeting, the AMTOB representatives submitted 21-point proposals on the sector's Income Tax, Value Added Tax, Import Duty, and Supplementary Duty affairs.
"If the tax is deducted at 50 per cent higher than the standard tax deduction rate, double taxation is imposed in the form of disallowance as well as 50 per cent higher deduction, which is contradictory to the main policy of the Income Tax Act, 2023. We recommended avoiding double taxation," the AMTOB said in the submission.
AMTOB Secretary-General Mohammad Zulfikar said the mobile industry is one of the primary sources of telecommunications and internet access in the country.
He argued that the overall digitisation of the country is directly dependent on the infrastructure of this industry while all sectors, including banking, mobile financial services, ride-sharing, e-commerce, education, and e-courier services, are managed directly or indirectly through mobile services.
He also pointed out that the overall growth of this sector determines the growth of all other sectors, and unfortunately, the different levies on this sector are relatively high compared to the other sectors in the country, and significantly higher than in other countries.
"We hope that the NBR will seriously consider the issues discussed, thereby demonstrating the government's commitment to digitisation in the country," said Mr Zulfikar.
AMTOB proposed to incorporate a provision clarifying that the government organisations like BTRC, Bangladesh Railway, Election Commission (EC), etc. which collect charges as public demand shall not be obligated to submit returns.
The statutory government authorities, autonomous bodies and organisations incorporated under any law are exempted from submitting income tax returns.
Currently, the tax rate for the mobile operators listed on the stock exchanges is 40 per cent, and for the non-listed companies, it is 45 per cent. Whereas the general corporate tax rate for non-listed companies is 27.5 per cent, and for listed ones 20 per cent.
AMTOB demands restructuring the tax rates for the mobile operators considering the tax rates applicable for general companies. It also proposed adjustment of minimum tax to ensure both government revenue and assess rights.
According to section 163(7), minimum tax shall not be refunded nor shall be adjustable against due for previous year or years or with refunded due for the assessment year from any years.

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