Mobile network operators in Bangladesh have urged the National Board of Revenue (NBR) to reconsider the high tax burden on the telecommunication sector, noting that continuous tax hikes have led to a significant decline in mobile and internet users.
During a pre-budget meeting with NBR officials on Wednesday, the Association of Mobile Telecom Operators of Bangladesh (AMTOB) submitted a 23-point proposal addressing income tax, value-added tax (VAT), import duty, and supplementary duty in the sector.
AMTOB Secretary General Lt Col Mohammad Zulfikar (Retd) highlighted that despite being an essential service, the telecommunication sector in Bangladesh faces the highest tax rates globally.
"The government is increasing taxes in this sector almost every year, which has had a negative impact on consumers. There has been a significant and alarming decline in mobile and internet users since mid-last year, a trend that continues," he said.
"We hope the government will consider our proposals and reduce taxes to a reasonable level," he added.
Cell phone operators urged the NBR to eliminate the Tk 300 VAT on SIM cards and e-SIMs to facilitate greater digital inclusion.
They also reiterated their demand for a corporate tax rate aligned with the general corporate tax structure in the country.
Mobile phone operators currently face a 45 per cent corporate tax, which is reduced to 40 per cent for publicly listed companies.
In contrast, non-listed companies in other sectors pay a 27.5 per cent tax, while the rate for listed firms ranges between 20 per cent and 22.5 per cent.
"We request that mobile operators not be classified separately and instead be taxed under the general corporate framework," AMTOB stated.
The association highlighted that while developing nations often subsidise their information and technology sector, Bangladesh's mobile phone companies are burdened with high tax rates, stifling the ICT sector's growth.
It also proposed a 10 percentage-point reduction in corporate tax for listed mobile operators.
AMTOB argued that lowering corporate tax rates would foster growth in the telecom industry, ultimately boosting government revenue.
Additionally, it called for removing the 20 per cent supplementary duty and the 1 per cent surcharge, pointing out that telecom services should not be taxed similarly to alcohol, tobacco, or luxury goods.
The 1 per cent surcharge applies when purchasing non-telecom products and services using mobile balance, while similar transactions via mobile financial services get exemptions. This creates an uneven playing field, AMTOB noted.
Regarding VAT disputes, the association pointed out the unpaid amounts currently accrue a 2 per cent monthly interest with no time limit. It proposed reducing the monthly interest rate to 1 per cent and capping the interest charge at 24 months.
AMTOB also highlighted that various government institutions and regulatory authorities provide VAT-applicable services but often fail to issue VAT invoices. As a result, businesses paying VAT cannot claim input tax credits, which increases their operational costs.
While Bangladesh has double taxation avoidance agreements with 40 countries, non-resident providers without a permanent office in Bangladesh must still obtain a non-deduction certificate from NBR. AMTOB proposed abolishing this requirement.
Lastly, operators suggested including digital content and similar capital expenditures in amortisation calculation as these intangible assets provide long-term business value.
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