Bows down to mobile cos’ pressure in desperate bid to hold 3G auction before its tenure ends
The government, bowing down to the pressure from the mobile operators, decided to slash again the VAT on the proposed 3G licence fees and revenue sharing in a desperate effort to hold the auction for the liecences before its tenure ends in October.
The National Board of Revenue on Wednesday started the process to cut the proposed VAT on 3G licence fees to 5 per cent from 7.5 per cent and exempt mobile phone operators from paying 15 per cent VAT on revenue sharing with the Bangladesh Telecommunication Regulatory Commission.
The NBR earlier reduced the proposed VAT to 7.5 per cent from the standard rate of 15 per cent as per the order of the government high ups following the demand of the operators for full withdrawal.
Mobile operators warned the government that they would not participate in auction for three licences for 3G operations if the tax issue was not settled.
‘The government is now desperate to hold 3G auction before the end of its tenure and the mobile operators, taking the chance, are realising all their demands,’ said a BTRC official.
The government is expected to get at least $800 million from awarding 3G linceces to three local mobile operators and an international company.
BTRC and NBR officials said that the government would lose millions of dollars because of VAT cut.
‘For any big tender or auction in the country money circulates among the ruling party men. So, it is not unusual that this government would be interested to hold such a big auction before the end of its tenure,’ an NBR official said requesting anonimity.
‘On government’s revenue earning ground there
is no logical basis to reduce the VAT on 3G license fees but the decision was taken by top government officials following heavy lobbying by the mobile phone companies,’ the NBR official told New Age on Wednesday.
He said the NBR already reduced the VAT on 3G lincece fees to 7.5 per cent from 15 per cent in May as per finance minister’s order.
‘We opposed the decision at that time and now we have been asked to reduced it even further,’ he said.
He said the decision of removing VAT on revenue sharing was justified as it causes double taxation on the telcos.
The decision of reducing VAT on 3G license fee to 5 per cent came at a meeting on Tuesday between finance minister Abul Maal Abdul Muhith, NBR chairman Ghulam Hussain and Bangladesh Telecommunication Regulatory Commission Sunil Kanti Bose.
The BTRC has already rescheduled the 3G auction thrice and set the latest date on September 2 while this government will leave office in October.
Apart from 3G tax, the NBR early in the week took an initiative to resolve the replacement SIM tax issue by forming a joint committee with the telcos after the High Court sent the case back to the tax office.
In early 2012, the NBR claimed a total of Tk 1,580 crore from the GP, Tk 774 crore from Banglalink, Tk 664 crore from Robi and Tk 82 crore from Airtel saying that the operators tried to evade taxes by false statements.
The BTRC will award three licences to three out of five mobile phone companies operating in the country and one to a foreign firm. Another local operator, the state-run Teletalk, has already 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 5 MHz with base price of $20 million for each MHz.
Banks at land
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could be supplied to the market stabilising the price of the essential commodity.
The BB also reminded the banks that it had made another decision on December 7, 2006 that the banks had to keep open their authorised dealer branches on every Friday and Saturday which located at the airports in Dhaka and Chittagong, the seaports in Chittagong and Mongla, and the land ports of Benapole, Sona Masjid, and Hili.
-With New Age input
