Contributions To Btrc Sof
NBR asks mobile operators to pay 10pc AIT
The National Board of Revenue has instructed the mobile phone operators in the country for deducting tax at source at the rate of 10 per cent on subscription to the social obligation fund of Bangladesh Telecommunication Regulatory Commission.
The revenue board has also turned down a demand of BTRC claiming that the subscription to the social obligation fund should be tax-free.
The NBR took the decision on Tuesday in the context of the recent argument between the BTRC and the mobile telephone company Grameenphone over deducting AIT on contribution to the fund.
In a letter written to the chief corporate affairs officer of Grameenphone, income tax policy branch of the revenue board said that it should deduct the AIT while making payment to the fund of BTRC.
‘The rule will be applicable for all mobile operators in the country,’ the letter stated.
According to Bangladesh Telecommunication Act-2001 and other licensing guidelines, mobile operators have to pay 1 per cent of their gross revenue to the social obligation fund to be spent for expansion of telecommunication facilities in underprivileged areas in the country.
Recently, GP paid its contribution to the fund after deducting 10 per cent AIT following a new article of the Finance Act-2014.
The NBR in the finance act included the article 52V which says that mobile operators will deduct AIT at the rate of 10 per cent at the time of any payment on account of any revenue sharing, license fees or any other fees or charges, called by whatever name to the BTRC.
BTRC claimed that the provision would not be applicable on the contribution to the social obligation fund as it was not income of the commission rather it was a fund to develop telecommunication infrastructure in the rural areas.
With this argument, BTRC on July 10 asked the GP to give back the deducted money to the commission by July 13 saying that there were no legal scopes to deduct the AIT from the contribution to the fund.
In this context, GP sought clarification from the revenue board whether the deduction of AIT would be applicable on such payment as the operator cannot deposit the deducted tax, also known as withholding tax, to the government exchequer.
The NBR in its clarification said that AIT would be applicable on payment like application fee, license renewal fee, annual license fee, revenue sharing and social obligation fund etc. under any licensing agreements and licensing guidelines between BTRC and operators.
So, operators will have to deduct the withholding tax at the time of such payment.
-With New Age input
