Mobile telecom players demand rethink of extra tax, duties in Bangladesh budget

  • Senior Correspondent,
    Published: 2019-06-18 23:32:58 BdST

The Association of Mobile Telecom Operators of Bangladesh or AMTOB has demanded a review of the proposals for the sector in the budget for 2019-20, saying these will hinder the government’s ‘Digital Bangladesh’ initiative.

It says the new duty policy for the sector will burden the customers with extra expenses, a situation it has described as “near death of the goose”.

AMTOB came up with its views on Tuesday at a news conference on the proposed budget, in which Finance Minister AHM Mustafa Kamal referred to Jean-Baptiste Colbert, the finance minister who served King Louis XIV of France from 1661 to 1683, and said the “art of taxation consists in so plucking the goose as to obtain the largest number of feathers with the least possible amount of hissing”.

“Mobile industry is the golden goose for the government as the industry lays golden eggs. In the budget speech, it was said that the goose must not be pained. This sector is contributing 6.2 percent to the GDP,” AMTOB Secretary General SM Farhad said.

“But the government announcement has not only caused pain, but it has pushed the goose near death as well. The government should keep this goose comfortable so that it can deliver more revenues,” he added.

Once the proposals for the mobile phone industry, like doubling the supplementary duty to 10 percent, are implemented, the users will get services of Tk 78.27 by paying Tk 100 while the rest Tk 22.72 will go to the government’s pocket.

Kamal proposed raising the minimum tax for mobile companies to 2 percent on their turnover from 0.75 percent earlier.

The planned rise in customs duty on smartphones to 25 percent from the existing 10 percent is also going to drive device prices.

Tax on SIM sale has also been proposed for an increase to Tk 200 from Tk 100.   

Farhad termed the 2 percent minimum tax for mobile companies on their turnover “unfortunate”.

“The planned thoughtless rise in taxes and new supplementary duty will put in jeopardy the entire process of the expansion of 4G network and rolling out of 5G network,” he said.

The industry was working for the inclusion of the marginal people in the ‘Digital Bangladesh’ project but the doubling of SIM card and extra supplementary duty proposed in the budget will “slow down the pace of achieving the Sustainable Development Goals”, Farhad said.

AMTOB hopes the government will review the proposals to take the telecom sector forward, he added.

AMTOB Vice-President and Robi Managing Director and CEO Mahtab Uddin Ahmed said: “None of our demands has been met, rather more taxes have been imposed.

“Robi suffered losses after the merger (with Airtel). We started to make profits in the beginning of this year, but we will not be able to get out of losses if this (imposition of more taxes) continues,” he said, adding that the proposal to raise tax on turnover will force the firm to pay from its capital.

“It’s unfair,” he said.

Banglalink Chief Corporate and Regulatory Affairs Officer Taimur Rahman, Grameenphone Head of Regulatory Affairs Hossain Sadat, and Teletalk Deputy General Manager Saiful Alam were also present.