Mobile operators call for revisiting tax structure

Mobile network operators in Bangladesh on Thursday called upon the government to revisit the corporate tax structure of the telecommunication industry and the SIM tax to help accelerate growth of the digital economy.

At a virtual roundtable on "Accelerating digital transformation in Bangladesh: Recommendations for mobile-sector taxation reform," they said the country's tax structure for the telecommunication industry is discouraging investment in the sector.

Currently, the sector pays a 40% corporate tax, a 2% minimum turnover tax, and Tk200 tax for each new subscriber identification module (SIM) card.

"The telecom sector is not asking for any stimulus package, special rebate, rescue package, or discount. All we are asking for is fairness and rationality in our taxation. All we are begging is not to kill the golden goose," said Mahtab Uddin Ahmed, managing director and chief executive officer (CEO) of Robi Axiata Ltd.

Erik Aas, CEO of Banglalink, said the government's revenue earnings from this sector is increasing but the sector is not progressing due to high taxation.

In response to the demands of mobile operators, Private Sector Industry and Investment Adviser to the prime minister, Salman F Rahman, said the taxation would have to be reviewed to find it out whether it impedes the telecom sector's growth.

"But it has to be confirmed that if taxes are reduced, then the mobile call rate also has to be  reduced at the user end and the service providing technology has to be upgraded," he added. 

Salman F Rahman said mobile operators will have to convince the government that its revenues from the sector would not be adversely affected by revisiting the tax structure.

Speaking as chief guest, Posts and Telecommunication Minister Mustafa Jabbar agreed with operators on abolishing the tax on mobile SIM cards.

"However, the decision on other taxes depends on policymakers," he added.

The telecom minister also asked operators to address customer complaints about poor service.

Among others, Bangladesh Telecommunication Regulatory Commission's Chairman Shyam Sunder Sikder, Posts and Telecommunications Division's Secretary Md Afzal Hossain, and Bangladesh Investment Development Authority's Executive Chairman Md Sirazul Islam, spoke at the discussion.

The programme was jointly chaired and moderated by Rahul Shah, director APAC, GSMA, and Julian Gorman, head of APAC, GSMA.