Telecom operators demand corporate tax cut in budget proposals

Mobile phone operators today urged the government to cut corporate tax, as the local telecom operators pay the highest tax among some South Asian countries.

Mobile phone operators have to pay a 45 per cent tax, whereas corporate tax rate is 22 per cent in India, 30 per cent in Pakistan, 28 per cent in Sri Lanka and 20 per cent in Afghanistan, said Association of Mobile Telecom Operators of Bangladesh (Amtob) in its recommendations for tax measures for the next fiscal year 2020-21.

The body sought the tax authority consider reducing corporate tax rates for mobile phone operators to 32.5 per cent, which is applicable for non-listed companies in the stock markets.

The Amtob also demanded the government withdraw 2 per cent minimum tax on turnover irrespective of profit or loss.

"This is not aligned with fundamental principle of profit based taxation. Despite loss or inadequate profits, tax payment from equity weakens the capacity of investment. Highest rate is imposed on mobile telecom sector whereas other industries enjoy low rates."

"We request the government to end this situation and maintain a business-friendly environment," said Amtob Secretary General SM Farhad.

He said mobile phone industry's contribution to the gross domestic product was 7 per cent in 2020. It has also created employment opportunities for 8.5 lakh people.