Date of publication: 13/02/2013
The tax regime in the telecom sector in Bangladesh should be revised with urgency for the sustainability sector, ministers and Government officials said on Tuesday.
A stable and predictable regulatory framework is a must, they said, to the durability of the telecom industry and safeguard measures investors.
"The more that you tax pressure, the more you get in return," said Mostafa Fadaly Mohammad, information technology and communication Minister, at a Conference.
The Bangladesh Enterprise Institute organized the discussion on the future of the telecom sector and its contribution to the Government vision 2021, in Dhaka.
The sector contributes currently 8.9 percent to the National Treasury.
"The Government should declare a five-year tax exemption to consolidate the telecommunications sector, just as it did for the import of the computer," States Sunil Kanti Bose, Chairman of the Bangladesh Telecommunication Regulatory Commission, the telecom regulator.
He urged the National Board of revenue to check if the current tax regime business-friendly.
Bose also criticised the 15 percent value added tax (VAT) had to pay to have their 2 G operators permit renewed.
There is still room for the operators to grow as voice penetration is 65 per cent, while the actual penetration 38-40 percent is, Bose said, adding that people use multiple SIMs.
Syed A Samad, Executive Chairman of the Board of Directors of the investment, also called for review of the tax regime.
"Tax is a real paradox for the telecom sector," he said.
Bangladesh mobile operators pay the highest amount of taxes in comparison to their colleagues around the world, according to Hasanul Haq Inu, the Minister of information.
"[Mobile operators] you have to go to the judge for the excessive taxes that you are being subjected to," he said.
Sri Lanka and Pakistan as examples, Rohan Samarajiva, LIRNEasia's founding President, citing an ICT policy and regulation think tank, called for a special Task Force to go over the tax structure.
"Thanks to the facilitation of the tax system, the telecom sector in Sri Lanka and Pakistan are now thriving," said Samarajiva, the Conference keynote speaker.
He said the mobile voice service took off in the country because of the "budget model" the sector.
"For Internet penetration has the same model to be followed. This is possible by means of good regulation alone. "
Michael Kuehner, chief executive officer of Robi, said the travel of mobile telecom in Bangladesh so far has been successful because the Government spectrum assigned to operators free 15 years ago.
"600 Bangladeshi taka (US $ 7.5) SIM tax is a major obstacle to penetration at the base level," said Kuehner, also President of the Association of Mobile Telecom operators of Bangladesh.
Nazrul Islam Khan, the Secretary of the ICT, said that Bangladesh lags behind the neighbouring countries in the area of Internet penetration.
Information "the whole world believes that broadband penetration influence GDP, but the Government of Bangladesh has no attention," said Minister Inu, while 15 percent sales tax on internet use suppression suggests. "BTW-they fail will give much higher returns to the country," he added.
Farooq Sobhan, Chairman of the Bangladesh Enterprise Institute, said the Government target of 70 percent telecom penetration in 2015 and 90 percent by 2021 can only be achieved through a business-friendly environment ".
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