NBR revenue from telcos falling on SIM tax cut

Jasim Uddin
SIM

A file photo shows a man inserting a SIM card into a card slot of a mobile handset in Dhaka. Indirect-tax revenue like SIM and value-added taxes from the country’s mobile phone companies has been declining since the fiscal year of 2012-2013 mainly because of a gradual reduction of SIM tax over the years, according to the National Board of Revenue. — New Age photo

Indirect-tax revenue like SIM and value-added taxes from the country’s mobile phone companies has been declining since the fiscal year of 2012-2013 mainly because of a gradual reduction of SIM (subscriber identification module) tax over the years, according to the National Board of Revenue.
The revenue board’s collection of SIM tax, VAT, source tax and other charges from the mobile operators dropped to Tk 3,449.27 crore in the just concluded fiscal year of 2015-2016 from that of Tk 5,230.17 crore in the FY 2012-2013.
In the FY 2011-2012, the collection from the sector was Tk 5,210.26 crore.
The large taxpayers unit (VAT) of the NBR collects the indirect tax from the country’s six mobile phone operators — Grameenphone, Robi, Banglalink, Teletalk, Airtel and Citycell.
The LTU (income tax) of the NBR collects income tax from the operators.
Officials of the VAT office said that total indirect-tax collection by the NBR from the operators in last fiscal year dropped by Tk 8.85 crore to Tk 3,449.27 crore from that of Tk 3,458.12 crore in the FY 2014-2015 as the government slashed the SIM tax.
The revenue collection from the sector declined by Tk 674.22 crore or 60.23 per cent in last fiscal year alone due to the reduction of the tax, according to a VAT office analysis.
The government reduced the tax on SIM card both for new and replaced one to Tk 100 in last fiscal year from that of Tk 300 in the previous year. Before the FY 2013-2014, the amount of SIM tax was TK 600 for a new SIM.
The revenue collection from the sector was Tk 3,869.74 crore in the FY 2013-2014, according to the NBR data.
The officials said that the LTU (VAT) could not recover the revenue loss (due to the SIM tax reduction) even though the government imposed 3 per cent supplementary duty on mobile services such as talk time in the budget for the FY 2015-2016.
Telecom is the second largest sector, after tobacco industry, in terms of revenue collection by the LTU (VAT), they said.
According to the data, sales of new SIM cards also declined by 27.85 lakh in the fiscal year though the number of SIM replacement increased by 26.94 lakh.
The revenue board got additional Tk 416.64 crore as SD which the government initially imposed on mobile telephone services at the rate of 3 per cent in June 2014 and increased to 5 per cent in June 2016.
The NBR also collected another additional Tk 50.45 crore as VAT due to the increase in the SD on mobile services.
Revenue earnings from the services were affected due to a government decision on blocking of different social media in the period.
NBR officials said that the LTU (VAT) also failed to achieve its revenue collection target for the fiscal year due to its failure in getting earnings at the expected level from the mobile phone sector.
Revenue collection by the unit in last fiscal year fell short of the target by Tk 5,188 crore as it managed to collect only Tk 30,417 crore against the target of Tk 35,605 crore.

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