Bangladesh telcos say high taxes are hindering industry growth

Bangladesh telcos say high taxes are hindering industry growth

The Association of Mobile Telecom Operators in Bangladesh (AMTOB) has reportedly called on the government to lower taxes on telecoms companies, saying the current tax structure is limiting sector growth and hobbling the government’s own "Smart Bangladesh" strategy.

According to the Daily Star, AMTOB secretary general Lt Col (retd) Mohammad Zulfikar told a roundtable on telecoms taxation that a significant portion of telco subscriber revenue goes to covering subscriber taxes and other duties. Roughly 39% of that revenue is eaten up by value added taxes, supplementary duties, SIM tax, customs duty and corporate taxes, among others.

Meanwhile, another 18% goes to revenue sharing expenses for International Internet Gateway and tower companies, and around 15% goes to annual license fees, annual spectrum fees, and revenue sharing with Bangladesh Telecommunication Regulatory Commission (BTRC), the report said.

Add in the cost of opex for network operations, marketing, administration, human resources etc, and only 2% of subscriber revenue is left for the operators, Zulfikar said.

Consequently, AMTOB wants the government to lower the corporate tax rate for listed companies from 40% to 20%, while the rate for unlisted companies should be slashed from 45% to 27.5%, the report said.

AMTOB also want to see the minimum turnover tax for telcos reduced as well. Currently, mobile telcos have to pay a minimum turnover tax of 2%, while other sectors pay just 0.6%.

Zulfikar was speaking at a roundtable on telecom taxation, organised by AMTOB and the Telecom and Technology Reporters' Network Bangladesh (TRNB).

At the roundtable, minister for telecom and ICT Zunaid Ahmed Palak agreed, saying the National Board of Revenue needs an “intelligent taxation policy” to allow the telecoms sector to grow, the report said.

BTRC chairman Md Mohiuddin Ahmed, said reviewing the taxes on telecom operators was necessary to help make the the telecoms ecosystem simpler, which would in turn accelerate the journey towards the "Smart Bangladesh" vision.

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