Dhaka, Jun 20 (bdnews24.com) — Finance Minister Abul Maal Abdul Muhith on Wednesday promised a rethink of the government proposal to levy 2 percent tax at source on mobile phone bills.
He came up with the assurance at a meeting with mobile phone operators at the Ministry of Finance.
Rabi's Executive Vice-President Mahmudur Rahman later told reporter, "We discussed five issues with the Finance Minister. The minister said he would look into those issues."
The representatives of the operators said at the meeting that the operators would not be able to issue receipts if 2 percent tax at source was slapped on mobile phone bills, as this would hurt subscription growth, he added.
The budget for next fiscal 2012-2013 that Muhith presented in parliament on June 7 proposes the tax on the total bill for post-paid subscribers and on the sale of top-up cards or during recharge in case of pre-paid users.
Currently, 90 million mobile-phone users across the country pay 15 percent Value Added Tax (VAT) on bills, according to the Bangladesh Telecommunication Regulatory Commission (BTRC).
Rahman said they were pumping huge money in subsidies. "If Tk 600 tax on each SIM card is waived, services can widen at the grassroots level. It can also help execute the government plan to build a digital Bangladesh."
"If the import tax and supplementary tax on SIM are increased from 20 percent to 30 percent in line with the proposed budget, it will impact the sector negatively.
"Besides, expenses will also rise if import tax on software for network development and other technologies is hiked from 3 percent to 30 percent."
Rahman, however, quoted the minister as saying in the meeting, "The proposal was made to help Bangladesh's software industry."
"But we informed him that software necessary for mobile phones are not made in Bangladesh," he added.
A finance ministry official, requesting anonymity, told bdnews24.com that Muhith said the government would reconsider the proposal to charge tax at source on mobile phone bill but not the one to reduce tax on SIM cards.
"There will be a decision to slap tax on phone bills of a specific amount and beyond, like Tk 200 and above," the official said.
Grameenphone CEO Tore Johnsen, Airtel CEO Chris Tobit, Banglalink Head of Corporate and Regulatory Affairs Zakiul Islam and top officials of other mobile phone operators attended the meeting.