The National Board of Revenue has widened the scope of amortisation benefit on different fees for mobile phone operators, according to a circular issued by the NBR.
The revenue board on Thursday issued the circular in line with the amendment of the Income Tax Ordinance-1984 as part of the budgetary measures for the fiscal year 2014-2015.
According to the circular, mobile phone operators will enjoy amortisation facility for different fees like spectrum assignment fees, GSM licence fees, licence acquisition fees or licence renewal fees paid to the Bangladesh Telecommunication Regulatory Commission.
Initially, the facility was limited only to spectrum assignment fees which were paid to the BTRC on or after the July 1, 2012.
The revenue board will also allow the fees that cell phone companies paid before July 1, 2012 as allowable expenditure, according to the circular.
Amortisation benefits for the telecom operators will be allowed from the assessment year of the FY 2013-2014.
In last year, the revenue board introduced the provision for the mobile operators.
Under the amortisation system, mobile operators will be able to show the fees as allowable expenditure for tax calculation. If, for example, the fees are paid for 15 years, the operators will be allowed to show the expenditure on an annual instalment basis for 15 years.
The amortisation facility will reduce the tax burden of the operators as it reduces their profit in the statements.
Last year mobile operators found that they could not utilise the benefit as more than half of such fees they paid before July 1, 2012, officials said.
On the other hand, operators pay fees to the BTRC in different names. All operators could not avail the benefit as the revenue board defined the fees as spectrum assignment fees, they said.
Considering the issues, the NBR made the changes in the income tax ordinance.
Under the new provision, mobile companies can demand the fees as allowable expenditure dividing into the amount as many years as it paid for and the revenue board will approve it.
The circular also explained some other tax measures including reduction of tax at source on commission that the big companies pay to their distributors and imposition of tax at source on several sectors like online advertisement.
The revenue board has also reduced tax at source on commission that different companies pay to their distributors for marketing their products to 3 per cent from the existing 5 per cent.
It also said that 3 per cent tax would be applicable on payment for online advertisement.
-With New Age input
