GP to take hit in tax hike

The government plans to raise corporate tax for publicly traded mobile phone operators, with Grameenphone being the lone listed firm in the sector now.
However, analysts said the move will discourage fresh listing of such companies.
At least one mobile operator, which was taking preparations to go for a public offering, may review its decision, they said, without disclosing the company's name.
Tax incentive is offered to bring companies to the stockmarket and the same benefit was given to Grameenphone when it was listed in 2009.
But now the government has narrowed the scope and increased corporate tax for listed operators to 40 percent from 35 percent, while the non-listed operators will pay 45 percent.
Finance Minister AMA Muhith said the provision was made to reduce the gap in tax rates between the listed and non-listed mobile operators.
TIM Nurul Kabir, general secretary of Association of Mobile Telecom Operators of Bangladesh, said: “It will discourage the telecom operators from going public.”
The companies that have plans to be listed will now review their decision, he added.
The proposed provision will also have an impact on Grameenphone, the lone listed operator.
“It is very unfortunate. When we are expecting a reduction in taxes, the government has imposed more taxes on the sector,” said Mahmud Hossain, chief corporate officer of Grameenphone.
He said the telecom sector is already burdened with different types of taxes.
He, however, hailed the government for reducing SIM tax by a half to Tk 300.