Budget goes against Digital Bangladesh: Amtob
The Association of Mobile Telecom Operators of Bangladesh (Amtob) yesterday called upon the government to revisit the budget proposal about telecom sector because it goes against the Digital Bangladesh vision.
If the proposed budget is passed without any change it will increase the cost of mobile usage for consumers and will also hinder the digitalisation process, the Amtob said in a press conference at the Pan Pacific Sonargaon Dhaka.
Every year in the budget the industry is presented with different moves that go against the government’s Digital Bangladesh vision, said Mahtab Uddin Ahmed, the acting chairman of Amtob.
And this year the proposed budget is contradicting with different policies and rules of the government, said Ahmed, also the CEO and managing director of Robi.
This imposition of increased taxes on the mobile industry was contradictory with the Foreign Private Investment (Promotion and Protection) Act, 1980 as such taxation would result in capital erosion for the loss-making overseas telecom operators, said SM Farhad, secretary general of Amtob. “Rather than supporting this vital industry further, the government has decided to add to the back-breaking tax structure.”
The proposed budget has undermined the contribution made by the telecom industry to implementing the vision of Digital Bangladesh.
“The telecom industry contributes more than 6.2 percent to GDP but there is no reflection of this fact in the proposed budget. It is widely recognised that the sector in Bangladesh is loaded with the highest tax burden in the world,” Farhad added. In the proposed budget the finance minister sought to increase the supplementary duty on all kinds of services taken through the mobile phone to 10 percent from 5 percent. This was implemented on the day of the budget.
The mobile operators also estimated the cost at the customers’ end would increase Tk 1,300 crore every year due to the higher supplementary duty.
The budget also proposed raising the SIM tax to Tk 200 from Tk 100, which will be a hindrance to growth.
The increase in minimum tax for mobile companies to 2 percent of their overall turnover from existing 0.75 percent was another blow.
The budget also proposed a 15 percent tax on retained earnings for listed companies, a move that will hit Grameenphone, the lone listed mobile operator.
“Tax on retained earnings is clearly double taxation and a clear violation of the tax policy,” said Hossain Sadat, a representative of Grameenphone.
The budget will particularly hit the small operators and will create challenges for their continued existence, said Taimur Rahman, chief corporate and regulatory affairs officer of Banglalink.
Teletalk representative Saifur Rahman Khan echoed the same.
The increase in import duty on smartphones to 25 percent from 10 percent will also create hurdles in expediting digital service in the country.
