Mobile operators ask govt to withdraw tax on SIM card

Wed Jun 15, 2005 1:54 am            

All the four private mobile phone operators yesterday urged the government to withdraw the proposed Tk 1,200 tax on new subscription in the budget for fiscal 2005-06.

Imposition of the tax will hinder fast growth of mobile telephone sector and also adversely affect foreign direct investment (FDI), said the top executives of the cellular operators at a press conference.

The number of mobile phone subscribers in the country will not exceed eight lakh instead of rising to projected five million during the next fiscal year if the proposed tax is not withdrawn, they said quoting an estimate.

Eric Aas, chief executive officer (CEO) of GrameenPhone, Nasir Baharom, managing director of Telekom Malaysia International Bangladesh (TMIB), service provider of AKTEL, Lars P Reichelt, CEO of Sheba Telecom that operates Banglalink, and Faisal Morshed Khan, vice president of Pacific Bangladesh Telecom Limited (PBTL), service provider of CityCell spoke at the press conference.

This sector has attracted huge FDI and is one of the largest contributors to government revenue earning through direct and indirect taxes, the CEOs said in a statement.

The strategy in the sector is to attract new customers with limited income. Connection fees have been reduced to Tk 200 and call charges by up to 35 percent while prices of cellphone sets have come down by almost 40 percent this year, they mentioned.

They hailed the proposed reduction of import duty on cellphone sets to Tk 300 each.

The new tax will discourage lower income groups and rural people to own mobile phone, the executives feared.

It will greatly hinder network expansion plans of all the operators for rural areas, they said.

The National Board of Revenue (NBR) meanwhile issued a statutory regulatory order giving effect to the proposed imposition of duty.

This has created chaos in the sector, pushing up the cost of mobile phone connections. Operators have allegedly stopped giving new connections or they are making quick buck in this situation.

The operators will meet NBR officials and the finance minister to resolve the issue.

They submitted a memorandum to Post and Telecommunications Minister Aminul Haque on Sunday, seeking his immediate intervention.

Faisal Morshed said even if the fresh duty is withdrawn, the government will get a huge amount in other direct and indirect taxes paid by cell phone operators and subscribers. “We are sympathetic to the customers and also concerned about government revenue.”

The NBR in a clarification yesterday said mobile subscribers are not required to pay the newly imposed tax for replacement of stolen or damaged SIM.

Meanwhile, Jatiya Jubo Jote and Citizen’s Rights Movement have urged the government to withdraw the proposed tax.

Sun Jun 25, 2006 3:58 pm