More tax benefits for mobile cos before 3G auctionStaff Correspondent
The National Board of Revenue is likely to give more tax benefits to the mobile operators by reducing board’s claim of Tk 3,100-crore SIM replacement tax as the Awami League-led government desperately wants to hold the 3G auction before the end of its tenure.
The NBR, which have already given a plethora of tax benefits as per government instructions, is likely to recommend to the finance ministry for reduction of a significant margin from its demand of Tk 3,100 crore in SIM tax from the operators, said officials of the revenue board.
The recommendation will be made based on the report of the tripartite committee that the NBR formed in last month to scrutinise the accuracy of its claim of Tk 3,100 crore on SIM replacement tax from four mobile operators, they said.
‘It seems that the mobile operators are squeezing out from the government every possible demand they has. The government has also bowed down to the pressure in a bid to hold the multi-million dollar 3G auction before its tenure expires in October,’ said an NBR official.
The committee consisting of representatives from the NBR, mobile operators and the Bangladesh Telecommunication Regulatory Commission has reached very close to a decision on the issue after a series of meeting in last three weeks, he said.
‘The committee wanted to finalise the report on Monday but they could not to do because of some differences between the NBR officials and mobile operators,’ a committee member said.
‘So, we worked on those differences on Tuesday and a team of mobile operators also met finance minister Abul Maal Abdul Muhith on the day,’ he said.
The committee may finalise the recommendation and submit it to the NBR’s Large Taxpayers’ Unit (value-added tax) in a day or two before the submission date for bid earnest money for 3G auction scheduled for August 29, a committee member said.
The final decision of tax cut will be finalised based on the recommendation of the committee, he added.
BTRC officials said that mobile operators expressed positively in submitting earnest money after getting assurance of tax cut.
They said NRB officials found around 50 per cent of the replacement SIM were properly registered where a lot of inconsistencies were also found in documents submitted by the operators as a proof of SIM sale.
NBR officials said the mobile operators could hardly show the original documents of SIM sale to its subscribers known as SAF though they were bound to preserve those documents under the BTRC rules.
They even did not preserve the SAF documents in their system server that proves the accuracy of NBR’s claim, they said.
The mobile operators are going to participate in the auction for 3G services, scheduled for September 8, after the government had met almost all of their demands bowing down to the pressure.
Following the government’s instruction, the NBR recently reduced VAT on 3G licence for the second time to 5 per cent from 7.5 per cent following government order because it was one of the major preconditions by the operators for submitting the application. VAT on 3G licence was initially set at standard 15 per cent.
The revenue board on August 6 exempted the mobile phone operators from paying 15 per cent VAT on their revenue from 2G and 3G services to be shared with the BTRC.
Earlier the government reduced the floor price of the auction from $30 million to $20 million following operators’ demand.
The revenue board reduced the SIM tax to Tk 300 from Tk 600 in the national budget for the FY14.
The BTRC will award four licences to five mobile companies operating in the country as the state-owned mobile operator Teletalk got the 3G licence by default.
A total of 40 MHz of spectrum will be auctioned for eight blocks where a single bidder can bid for maximum two blocks.
The minimum allocation for a spectrum block is 5MHz with base price of $20 million for each MHz.
Grameenphone, Banglalink, Robi and Airtel, before submitting the applications, demanded that the government must resolve the SIM replacement tax issue before August 29 which is the last date for submitting bid earnest money.
Since early 2012 the NBR has been claiming Tk 3,100 crore from the four operators as SIM replacement tax saying the operators had sold those SIMs to new clients but demanded that they replaced it to its original clients.
Out of Tk 3,100 crore, the NBR claimed Tk 1,580 crore from the GP, Tk 774 crore from Banglalink, Tk 664 crore from Robi and Tk 82 crore from Airtel.
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