Mobile network operators have asked the tax authorities to scrap the existing 2% minimum tax on them, calling it contrary to the key spirit of the income tax law, which does not support such levies when a company has no income.
Under the current system, the Association of Mobile Telecommunications Operators of Bangladesh (Amtob) pointed out, a company has to pay taxes even when it suffers losses. This means that it will have to pay taxes on its capital.
Remove or reduce the minimum tax rate for the survival of this industry – a major player in the construction of “digital Bangladesh” announced by the government, demanded Amtob.
The association also called for reducing the corporate tax rate for mobile telecommunications operators, citing that the existing rate is higher than in other sectors.
Brigadier General (Retired) SM Farhad, Amtob’s General Secretary, presented the proposals on behalf of the association during a pre-budget conference with the National Board of Revenue at NBR’s Segunbagicha headquarters in the capital on Wednesday .
In addition, representatives from major corporate taxpayer associations such as tobacco and beverages presented their proposals at the meeting, which was chaired by NBR Chairman Abu Hena Md Rahmatul Muneem.
Currently, any company must 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, companies have expressed their dissatisfaction with the collection of income tax even when they have no income.
In a proposal on a new income tax bill recently sent to the NBR, the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), the country’s apex trade body, said that no income tax should be deducted if there is no income.
SM Farhad said that the main spirit of the income tax law is that tax is paid on income, not on sales or receipts. He suggested that the tax be removed or reduced to a minimum of 0.5%.
Amtob executives pointed to the corporate tax rates of mobile companies in other neighboring countries and proposed to reduce tax rates for listed and unlisted companies from the existing 40% and 45% to 25 % and 32%, respectively.
In addition, they pointed out that 10% of the cost of corporate social responsibility (CSR) programs be considered eligible expenses for reimbursement, that the non-deduction certificate system for non-resident suppliers be abolished, that telecommunications services are exempt from withholding tax (TDS) and VAT.
During the discussion, Shehzad Munim, Managing Director of British American Tobacco, Bangladesh, on behalf of the Bangladesh Cigarette Manufacturers Association, expressed concern about “fake” tax stamps or rolls of tape on packets of cigarettes. cigarettes.
Highlighting the issue of excessive taxation in this sector, he said, the higher the tax rate, the higher the tendency for tax evasion. This amounts to counterfeiting currency.
He called for not increasing taxes in this sector and even if they are increased, they must be made tolerable. He emphasized stability, supervision and governance in the sector.
The locally run Cigarette Manufacturers Association also raised concerns about “fake” tape rolls and called for no price hikes on cigarettes this time around.
Md Harunur Rashid, chairman of the Beverage Manufacturers Association, has proposed a 10% reduction in existing beverage surcharges and the abolition of water tariffs.
Another beverage sector representative suggested that the duty on sugar used in the industry be equal to that of other importers.
Addressing mobile operators, the NBR chairman said: “We will look at how many shares companies have unloaded on the stock market and what benefits they derive from it.”
He also said that the tax authorities would look into the issue of the water tax.
“We’re increasing the tax burden to keep people away from tobacco. However, that doesn’t always work. It creates opportunities for smuggling,” he said.
“Therefore, it is necessary to proceed with caution in this sector so that incomes do not fall, smuggling does not occur and health protection is ensured,” he added.