Country's mobile operators demanded Wednesday withdrawal of the proposed Tk 300 SIM (subscriber identification module) tax and Tk 100 SIM replacement tax for facilitating telecom sector's growth.
At a press conference, they also called for reviewing the existing corporate tax rates for telecom operators and proposed enhanced rate of value added tax on mobile handset imports.
The mobile operators said the heavy tax burden proposed in the national budget for fiscal year (FY) 2014-2015 will undoubtedly create a hindrance to the affordability of the mobile phone-based services that will lead a massive blow to the government's vision of Digital Bangladesh by 2021.
Association of Mobile Telecom Operators of Bangladesh (AMTOB) organised the press briefing to share its reactions to the proposed budget at a city hotel where the mobile operators expressed their dissatisfaction as there was almost no incentive in favour of the telecom sector in the proposed budget for the upcoming fiscal (2014-2015) despite its substantial contribution to the country's economic development.
AMTOB Secretary General TIM Nurul Kabir said the infrastructures developed by the telecom operators all over the country are great resource of the nation as people from all sections of the society are receiving multidimensional services by using the infrastructures.
"The mobile phone operators help the government bring un-banked and unconnected people in the remote villages under the banking channel and connectivity respectively. So, the government should lift the unfavourable budgetary proposals to take the country further ahead in the future," he said.
The AMTOB Secretary General said in the proposed budget, corporate tax for non-listed companies has been reduced to 35 per cent from 37.5 per cent but unfortunately it has been kept unchanged for the MNOs at 40 per cent for publicly traded companies and 45 per cent for non-listed firms.
"We don't want any discrimination in the corporate tax and it will discourage prospective telecom companies to be listed with the capital market through floating initial public offering (IPO). The discrimination will also send negative signal to the foreign investors," he said.
He said it would have been helpful for the government if it had exempted the SIM tax as the number of mobile users would increase and it could earn greater revenues.
"At the same time, the proposed 15 per cent VAT on mobile handset imports, rising from 10 per cent at present, will increase the prices of the imported devices, making 3G enabled cell phone sets much costlier," he said.
Ishtiaq Hussen Chowdhury, Director of Grameenphone Stakeholder Relations Corporate Affairs Division said they have been providing high-speed internet facility all over the country but it brings nothing if the low income groups in remote villages could not use it because of their inability to purchase a smart phone.
"So, we would request the government not to make further hike on mobile handset imports. The tax and VAT rate should be at a level so that people from all walks of life can afford it," he said.
Ashraful H Chowdhury, Chief Corporate Affairs Officer of Airtel Bangladesh, was critical of the budgetary proposals and said a good number of the investments made by the telecom operators are spent as subsidy to take control of their market share.
"So, we have no other alternatives but shifting a portion of the increased tax burden on the customers' end for our survival," he added.
They said the mobile operators are paying about Tk 55 to government for every Tk 100 they earn and the amount will be much higher once the proposals are implemented.
Mobile phone industry is one of the major drivers of the economy in Bangladesh. Last year, the industry contributed more than 3.0 per cent of the GDP (gross domestic product) growth. It is also one of the largest contributors to FDI and the biggest source of government's tax revenue.
According to the statistics of Bangladesh Telecommunication Regulatory Commission (BTRC), the country's six telecom operators have managed to book 115.63 million of mobile phone users in the country till April last.
Among others, Mahtab Uddin Ahmed, Chief Operating Officer of Robi, Nishat Ali Khan, Deputy General Manager of Citycell and Shamsuddin Ahmed, Accounting Senior Director of Banglalink, were also present at the post budget press briefing.
AMTOB for withdrawal of proposed SIM tax in budget
FE Report | Published: June 12, 2014 00:00:00 | Updated: November 30, 2026 06:01:00
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