Cable TV operators dodge Tk2,000cr taxes annually

As ubiquitous as cable television has become in Bangladesh in the past two decades, the government has benefited from the sector very little – in terms of revenue.

Cable television operators have dodged paying taxes to the tune of thousands of crores of taka annually by providing false information about the number of connections.

The cable TV operators earn more than Tk14,000 crore annually.

The government is supposed to get Tk2,000 crore in various forms of taxes against that earning.

However, the cable operators are paying only Tk8 crore, depriving the government of a large amount of revenue.

There are more than 3.80 crore cable television network connections across the country at present, according to a survey of the National Board of Revenue.

Users have to pay an operator Tk300 – as monthly fee fixed by the government – for each connection.

The cable operators earn Tk1,150 crore as connection fees per month.

They are supposed to pay 15 percent VAT and 35 percent corporate tax on their incomes, according to the Value Added Tax Act, the Supplementary Duty Act, and the Income Tax Ordinance.

But, in the last fiscal year, the government only got Tk8.77 crore.

The amount was even less in the previous years.

Officials of the revenue board allege that the cable operators are dodging the taxes by providing false information.

The officials also feel helpless for not being able to do anything about it because the cable TV businesses are controlled by people with strong political connections.

"The government is being deprived of revenues from this sector as the cable TV business is not under its control," said Md Mosharraf Hossain Bhuiyan, chairman of the revenue board and also senior secretary of the Internal Resources Division at the finance ministry.

The National Board of Revenue was willing to work with the information ministry for bringing the sector under control to ensure proper revenue collection, added Mosharraf.

Outdated system

Meanwhile, satellite television business all over the world has upgraded to digital platform, but in Bangladesh it has been stuck in the analogue system that is 30 years old.

The revenue board and the information ministry have taken a step to bring the business under a digital system.

The NBR has proposed installing set-top box and assigning a separate identification number for each connection across the country and then preserve the data.

It also proposed fixing an expiry date for the present analog system.

Annoying services

Complaints about unusually high connection set-up charges, poor picture quality, and unavailability of preferred TV channels are always there against cable operators in every neighbourhood in the capital and elsewhere in the country.

Saleha Akter, a resident of the capital's Mohammadpur area, told The Business Standard, "My operator took Tk1,500 as service charge for setting up the connection to my TV. We have to pay Tk400 as monthly fee. But many good channels are not there!

"Moreover, the quality of transmission of the satellite channels is not good.

"I heard influential people of the area run the cable business here. We are just helpless."

The Cable Operators' Association of Bangladesh does not deny these allegations.

The association also has no objection to digitalisation of the platform.

"We do not have any objection to paying the government taxes," said its founding chairman SM Anwar Parvez.

The operators would also benefit from digitalisation of the business, he said.

However, he demands reduction of the tax per connection "as most users are from middle class and lower middle class".

On the other hand, the owners of satellite television stations have expressed frustration over the current state of the sector. The Association of Television Channel Owners thinks that measures should be taken to free the cable television business from the grip of local influential people.

President of the association Anjan Chowdhury said, "The government does not know the exact number of cable TV users. But, when it will be digitised the government will have that number and revenues will increase."

The CNN and the BBC started broadcasting their programmes for a few hours in Bangladesh for the first time in 1992 using the state-owned Bangladesh Television's equipment.

ATN Bangla appeared as the first satellite television station in the country in 1997.

At present, several hundred local and foreign satellite TV stations are broadcast in Bangladesh.

According to a report of the Bangladesh Bureau of Statistics published in 2012, around 1.87 crore families had television as of March 2011. A total of 1,387 people were involved in the cable business at that time.

The number of users and people engaged in the sector has more than doubled by now due to the spread of electricity distribution across the country.

Currently, the cable TV business in Bangladesh is being operated according to the ordinance for Cable Television Network Operation and Related Regulations, 2006, and the Cable Network Operation and Licensing Rules, 2010.