Telecommunications operators have requested the government to waive SIM tax and VAT on the internet and resolve long-pending tax-related disputes for expediting mobile- phone penetration.
They have also sought reduction in the high rate of corporate tax on mobile-phone companies, which is currently similar to what is levied on health-hazardous cigarette companies.
Such a situation of fiscal measures, the telecom operators said, is discouraging foreign direct investment in Bangladesh and also driving it away to other neighbouring countries.
Association of Mobile Telecom Operators of Bangladesh (AMTOB) made the proposals at a per-budget meeting with the National Board of Revenue (NBR) on its premises. Senior secretary of the Internal Resources Division (IRD) and NBR chairman Md Nojibur Rahman presided.
AMTOB secretary-general and Chief Executive Officer (CEO) TIM Nurul Kabir said the government should consider withdrawal of surcharge on mobile-phone users, as this extra cost made phone calls costlier.
He stressed the need for a comprehensive policy review for the telecommunications sector in the budget for the upcoming fiscal year (FY) 2017-18.
AMTOB member Shahed Alam gave a brief presentation on 'taxation reform for sustainable telecom industry', highlighting growth and barriers and recommending ways out in the new budget proposals.
He said the telecom sector is currently contributing 6.2 per cent to the country's GDP and has the potential to contribute 8.0 per cent by 2020.
Of the total population, there are some 54 per cent unique mobile subscribers in Bangladesh while the rest 46 per cent yet to subscribe, the presentation showed.
And some 82 per cent of people have yet to access the internet, it revealed.
He said mobile tariff rate is higher in Bangladesh compared to that of neighbouring countries due to less use of smart-phones.
Smart-phone penetration is only 27 per cent in the country. "Country's telecom companies have invested $3.8 billion for 3G in the last three years to give 65 per cent 3G coverage," he told the meet.
But only 18 per cent people are currently connected to the third-generation telecom technology.
High cost of smart phone and some other factors may be responsible for this slow progress in what is dubbed fastest-growing sector of the world economy.
Telecom sector contributes a significant amount of revenue to the public exchequer. Of Tk 100 revenue of mobile phone, Tk 47 goes to government exchequer as tax and fees.
AMTOB members said high rate of tax often discourages foreign direct investors from going for further expansion of businesses.
They urged the NBR to talk to Bangladesh Telecom Regulatory Commission (BTRC) for releasing more spectrums so that mobile operators can offer better service.
AMTOB leaders sought joint support from regulatory bodies relating to auction of unsold spectrum.