Mobile operators bemoan tax burden

Although mobile network services have become essential amid the ongoing coronavirus pandemic, the taxes levied on operators hamper the industry's growth and also burden consumers, according to experts.

"The consumption tax for mobile network services is higher than all other industries," said Mahtab Uddin Ahmed, president of the Association of Mobile Telecom Operators of Bangladesh (AMTOB).

If a customer spends Tk 100 on a mobile service, Tk 53 goes to taxes while another Tk 20 is used to avail various services from other licensees in the sector.

Besides, the corporate tax is as high as 45 per cent and even if a network provider fails to make a profit, it still has to pay 2 per cent turnover tax.

"So, the tax structure needs to be reformed and unified licensing needs to be enacted so that mobile operators can provide more services," he added.

Ahmed, also managing director and chief executive officer of Robi Axiata, made these comments on Sunday while speaking at an online discussion styled, "Mobile Communication in Bangladesh: Challenges of the Future".

The event, jointly organised by AMTOB and Daffodil International University, was a part of a series of webinars beginning in January.

"It is possible to solve the telecom sector's problems through a coordinated effort from relevant government departments, including the telecom and tax regulatory bodies," said Md Kamruzzaman, additional secretary of the Posts and Telecommunications Division.

Before the next national budget proposal, all relevant stakeholders and the Bangladesh Telecommunication Regulatory Commission (BTRC) could discuss these issues to make recommendations for the National Board of Revenue, he added.

A new tax is imposed on the telecom sector every year, according to Abdus Salam, Bangladesh country manager of Ericsson, a Swedish multinational networking and telecommunications company.

The number of licenses awarded to network providers has also created a complex ecosystem that is affecting the quality of service, he said.

And even though the recent spectrum auction was highly transparent, making it a praiseworthy initiative, a much larger spectrum base is needed to ensure quality service, Salam added.

A concerted effort from various stakeholders, including the BTRC, network operators and tower companies, is needed to improve this situation, said BTRC Chairman Shyam Sunder Sikder.

"Bangladesh's telecom sector has come far over the years but there is still much left to be done," Sikder said, adding that it is possible to solve the sector's issues through continuous dialogues or discussions between industry stakeholders.