The contribution of mobile network operators to the GDP can significantly increase from the current 7 percent with proper tax policy reforms, said the Association of Mobile Telecom Operators of Bangladesh.
"Since the [telecom] sector has been going through multiple issues regarding taxation, it is time to find solutions to them for encouraging the industry to add more value to the nation in the coming days," Mahtab Uddin Ahmed, president of the association, said in a press release issued on Thursday.
"The whole country is facing unprecedented challenges due to the Covid-19 outbreak and telecom ecosystem is no different," he said, adding that the sector has become the backbone of all sorts of communication, business and entertainment.
The association has recently placed its budget proposal to the National Board of Revenue (NBR), in which it called for elimination of SIM tax – currently Tk200 per SIM card.
Tax is a major barrier for mobile operators in letting them take the service to lower-income people, the association said, stating that removal of this tax will support offering services in rural areas.
Currently, corporate tax for the mobile industry in Bangladesh is 45 percent, much higher than 22 percent in India, 30 percent in Pakistan and Nepal, 28 percent in Sri Lanka and 20 percent in Afghanistan.
The mobile operators' association requested the NBR to reduce the corporate tax to 30 percent – the same rate as the standard for other companies in Bangladesh.
Mobile operators also called for elimination of minimum turnover tax, VAT exemption for regulatory agencies and elimination of double taxation.
Brigadier General SM Farhad (retd), secretary general of the association, said licensing segmentation of mobile network operators has narrowed down growth opportunities, limiting the growth opportunity for government's revenue stream as well.
"Imposing VAT deduction at source according to the VAT law of 1991 will increase revenue. The 4G penetration is still very slow in the country due to the high price of compatible handsets, which requires special attention," he added.