AMTOB proposes tax cuts on mobile services to ease consumer burden

The telecom operators' industry body, the Association of Mobile Telecom Operators of Bangladesh (AMTOB), has proposed abolishing the existing supplementary duty on mobile talk-time and data usage to reduce the tax burden on consumers.

The AMTOB warned that the current tax structure is hindering growth and digital inclusion.

At a pre-budget meeting with the National Board of Revenue (NBR) at its headquarters in Agargaon today (27 April), AMTOB presented its proposals, highlighting taxation as a key challenge.

"Mobile operators currently pay nearly 56% of their gross revenue in taxes, VAT, and other charges. While the global average tax on this service is 22%, and 26% for Asia-Pacific countries," said Lt Col Mohammad Zulfiqar (Retd), Secretary General of AMTOB.

He also said, "This burden increases further during spectrum auctions, affecting investment capacity and long-term sustainability."

He urged the abolition of the 20% supplementary duty and 1% surcharge on telecom services to make connectivity more affordable.

The association also proposed withdrawing the Tk300 VAT on SIM and e-SIM replacement, arguing that it discourages new users, particularly among low-income groups.

AMTOB further urged the removal of VAT on spectrum allocation, citing double taxation, as operators are taxed again when delivering services using the same spectrum.

The association also recommended reducing the corporate tax rate, currently 40% for listed and 45% for non-listed telecom companies, to align with regional standards.

During the discussion, entrepreneurs from the tobacco sector presented differing views on the existing consumer-level tax system.

On behalf of British American Tobacco Bangladesh (BATB), a proposal was made to introduce a specific tax system in place of the existing ad-valorem system.

"As the current tax rate is up to 83%, including VAT, supplementary duty, and surcharge, one of the highest in the world, there will be limited scope for increasing government revenue in the future. Therefore, the existing ad valorem system can be replaced with a specific tax system," said Arafat Jaigirdar, a representative of BATB.

He added that this would increase government revenue while also easing pressure on companies.

Representatives from Japan Tobacco International Bangladesh and Philip Morris Bangladesh Limited agreed with this view.

However, representatives of Abul Khair Tobacco disagreed. They proposed increasing prices in the upper three tiers under the existing tax structure.

They also claimed that this would generate an additional Tk10,000 crore in government revenue each year.

It is worth noting that the tobacco sector is the single largest source of revenue for the government, contributing around Tk50,000 crore annually.

Speaking at the meeting, NBR Chairman Abdur Rahman Khan said that cigarette prices and tax rates in Bangladesh would be reviewed in light of those in other South Asian countries.