Telcos seek VAT waiver on 4G service revenue sharing

Association of Mobile Telecom Operators of Bangladesh has sought exemption from payment of value-added tax on revenue sharing with Bangladesh Telecommunication Regulatory Commission for 4G services.
As per licensing conditions, mobile operators pay 5.5 per cent of their gross revenue as revenue sharing to the government, represented by BTRC.
VAT at the rate of 15 per cent is applicable on revenue sharing under 4G (fourth generation mobile technology) licences, said National Board of Revenue officials.
Earlier in 2013, the revenue board through two separate special orders exempted VAT on revenue the mobile companies share with the BTRC for 2G and 3G services. 
The NBR offered the exemption finding double taxations on the revenue sharing as the operators collected VAT on the amount from subscribers or consumers. 
Telecom operators fear that the BTRC might seek VAT on revenue sharing for 4G services as previous NBR orders deal with only 2G and 3G services, according to a letter of the AMTOB sent to NBR chairman Md Mosharraf Hossain Bhuiyan on March 8. 
In the letter, AMTOB said that mobile operators were extremely concerned that VAT might be imposed on revenue sharing in absence of a separate order. 
It has been agreed in principle by the NBR through its special orders in August 2013 that the 5.5 per cent (shared revenue) is part of the net receipt of the operators after payment of 15 per cent VAT on total service value realised from the customers, it said.
In this situation, the association has requested the NBR to issue a special order for exempting VAT from the sector, said the letter, signed by AMTOB secretary general TIM Nurul Kabir.
Officials said that NBR high-ups would take a decision after scrutinising the issue. 

News Courtesy: www.newagebd.net