bdnews24.com :
Traders will find illegal ways to bring in mobile phones if 15 percent VAT on their import is imposed, mobile operators and businesspersons claim.
Both the Association of Mobile Telecom Operators of Bangladesh (AMTOB) and Bangladesh Mobile Phone Importers Association (BMPIA) demanded that the plan be dropped before the budget for the next fiscal is passed.
In separate press briefings at Ruposhi Bangla Hotel on Wednesday, they also recommended to withdraw the proposal to impose Tk 100 tax for SIM replacement.
Finance Minister Abul Maal Abdul Muhith suggested adding more VAT on the import of mobile phone for the ‘sake’ of local businesses while presenting the budget proposal for the 2014-15 fiscal on June 5.
The new budget, now under discussion, will be passed on June 29 and come into effect from July 1.
AMTOB at the briefing also recommended withdrawing Tk 300 tax on SIM cards and curbing corporate tax.
Its Secretary General TIM Nurul Kabir said every time a subscriber spent Tk 100, Tk 55 of it went directly to the government exchequer.
The new budget proposes more taxation which, if implemented, will not allow mobile services to continue in the current rates, he said.
“Mobile service can no longer grow with subsidies. Businesses will have no option but to increase service fees.”
Mobile operator Robi’s Chief Operating Officer Mahtab Uddin Ahmed said the tax hike will reduce SIM sale and cut the growth in the sector.
Grameenphone’s Ishtiaque Hasan Chowdhury voiced a similar concern.
Representatives of other mobile operators including Airtel, Banglalink and Citycell were also present at the AMTOB press meet.
BMPIA President Mostofa Rafiqul Islam at the other briefing said Bangladesh’s current demand for mobile phones-over 20 million per year-depended on imports.
“Currently there is a 16.5 percent tax (including advance income tax) on it. Adding an additional 15 percent VAT will have a negative impact. This might lead to increased illegal import of mobile handsets.”
He said nearly Tk 2.5 billion in tax was paid on the imported mobile phones last year.
“No company in the country is manufacturing mobiles phones. All local brands are selling handsets manufactured in China,” Islam added.
BMPIA made three proposals – levying tax on mobile phones similar to other technologies or withdrawing the proposed additional VAT and reinstating the previous rate or setting a Tk 100 tax on each handset.
Islam said, “The tax rate could be made equal in each case to provide local companies with opportunities. The government might also give special incentives to the local entrepreneurs.”
Secretary General Nurul Kabir also attended the BMPIA press briefing apart from the representatives of importing agencies.
