Mobile network operators have called upon the revenue authorities to withdraw the existing 2% minimum tax on them, terming it contradictory to the key spirit of the income tax law, which does not support such levies when a company does not have its income.
Under the existing system, the Association of Mobile Telecom Operators of Bangladesh (Amtob) pointed out, a company must pay tax even when it suffers losses. That means it will have to pay the taxes from its capital.
Withdraw or reduce the minimum tax rate for the survival of this industry – a major player in building "Digital Bangladesh" announced by the government, Amtob demanded.
The association also called for reducing the corporate tax rate for mobile telecom operators, mentioning that the existing rate is higher than in other sectors.
Brigadier General (retd) SM Farhad, secretary general of Amtob, presented the proposals on behalf of the association at a pre-budget parley with the National Board of Revenue at the Segunbagicha headquarters of the NBR in the capital on Wednesday.
In addition, representatives of large taxpayer companies' associations such as tobacco and beverages presented their proposals at the meeting, which was chaired by NBR Chairman Abu Hena Md Rahmatul Muneem.
At present, any company has to pay the minimum tax at the rate of 0.5% to 2%, regardless of its income. The rate is 2% for mobile phone operators.
For a long time, businesses have been voicing their dissatisfaction with the collection of income tax even when they do not have income.
In a proposal on a new income tax law draft recently sent to the NBR, the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), the country's apex trade body, said no income tax should be deducted if there is no income.
SM Farhad said the principal spirit of the income tax law is that tax is paid on income, not on sales or receipts. He suggested that the tax be withdrawn or reduced to a minimum of 0.5%.
The Amtob leaders highlighted the corporate tax rates of mobile phone companies in other neighbouring countries and proposed reducing the tax rates of listed and non-listed companies from the existing 40% and 45% to 25% and 32%, respectively.
In addition, they stressed that 10% of the cost of corporate social responsibility (CSR) programmes be considered as authorised expenditure for a rebate, non-deduction certificate system for non-resident suppliers be abolished, exemption of telecom services from tax deduction at source (TDS) and VAT.
At the discussion, Shehzad Munim, managing director of British American Tobacco, Bangladesh, on behalf of the Bangladesh Cigarette Manufacturers Association, expressed concern over "fake" tax stamps or band rolls on cigarette packets.
Pointing to the issue of excessive tax in this sector, he said, the higher the tax rate, the higher the tendency of tax evasion. This is tantamount to counterfeiting currency.
He called for not increasing tax in this sector and even if it is increased it should be made tolerable. He emphasised stability, supervision and governance in the sector.
The locally run Cigarette Manufacturers Association also came up with its worries over "fake" band rolls and called for not raising the price of cigarettes this time.
Md Harunur Rashid, president of the Beverage Manufacturers Association, proposed a 10% reduction in existing supplementary duty on beverages, and the withdrawal of tariffs on water.
Another representative of the beverage sector suggested that the duty on the sugar used in the industry be made equal to that of other importers.
Addressing the mobile operators, the NBR chairman said, "We will look into the number of shares the companies have offloaded into the stock market and how much advantage they take from here."
He also said the revenue authorities would look into the issue of tax on water.
"We increase the tax burden to keep people away from tobacco. However, it may not always work. It creates opportunities for smuggling," he said.
"Therefore, it is necessary to proceed with caution in this sector so that revenue does not fall, smuggling does not happen and health protection is ensured," he added.