NBR halves VAT on 4G licence, renewal fees
The National Board of Revenue (NBR) yesterday halved the valued-added tax (Vat) on licence issuance and renewal fees to 7.5 per cent in order to reduce the pressure on telecom service providers and increase tax collection.
The move comes more than two weeks after the revenue authority exempted network operators from VAT on revenue shared with the Bangladesh Telecommunication Regulatory Commission (BTRC).
"We took the latest decision to reduce VAT on 4G licence or renewal fees for the benefit of the telecom sector. This will also help us get more revenue," said Kazi Farid Uddin, first secretary of VAT policy of the NBR.
Before the reduction, 15 per cent VAT was applicable on 4G licence issuance or renewal fees after the VAT and Supplementary Duty Act 2012 came into effect from July 1, 2019.
However, mobile phone operators were reluctant to deposit the indirect tax as they could not claim input tax credit in absence of the BTRC's VAT registration.
Now, after the rate cut, no VAT rebate will be applicable, the NBR said, adding that 4G licences cannot be made operational prior to the payment of the reduced rate of VAT on the licence fees, technology neutrality or spectrum fee, royalty or their renewals.
The revenue authority said the reduced rate of VAT on 4G licence or renewal fee would be effective retrospectively from July 1, 2019.
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