Fresh tax composition for telecom sector imperative to materialize Digital Bangladesh

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'To include everyone found in the united states under digital connection, we must ensure inexpensive smartphones for everybody and a totally fresh go through the existing taxation composition for the telecom sector to changeover towards Digital Bangladesh,' Robi’s Managing Director and CEO Mahtab Uddin Ahmed told Dhaka Tribune's Ibrahim Hossain Ovi within an interview.

What techniques do you think should be taken up to overcome the existing limitations of the telecommunications industry and produce digital services more accessible?

We must further lower the cost. As far as the operators are worried, there is no bedroom for us to do that. Since 2009, the telecom industry has reduced info prices by 99%. 

Data selling price per megabyte (MB) is Tk0.03 now, additional reduction would mean we must offer free info which isn't viable for just about any commercial entity. Together with the info price, our voice selling price can be among the lowest on the globe. Therefore, one method to reduce price is definitely to reform the taxation composition.

The tax rate in Pakistan, Sri Lanka, India, and Afghanistan are 30%, 28%, 22%, and 20% respectively. Although our corporate tax rate is normally 45%, the minimum amount tax fee is raising our powerful corporate tax amount to a higher level since we need to pay minimum turnover taxes of 2%.

The other way to lessen the cost could possibly be the convergence of services. As a digital service provider, we can offer a great many other offerings at an inexpensive cost that would lower the expense of telecom services drastically. Having the vast network and countrywide presence, it could be much easier for us than anyone else to serve the persons with affordable digital solutions.

How do you evaluate the national budget for FY21? 

The spending plan fell short of expectations on various counts. Nothing was done to address the adverse effect of discriminatory 2% minimum amount turnover taxes imposed on the mobile industry. This taxes is slowly but surely killing small operators and producing an inroad to make a federal government sponsored monopoly in the telecom sector.      

Whenever we are desperately trying to keep carefully the country linked through our mobile telecommunication providers, increasing supplementary duty from 10% to 15% helps it be less viable for a multitude of people who are already struggling to survive amid the Covid-19 pandemic. 

The importance of digital lifestyles or technology has increased drastically due to the pandemic. How coherent may be the proposed funds in this context?

Through the shutdown, we noticed just how fast our customers followed digital services like cellular financial services, e-commerce, net banking, video conferencing systems, chatbots, digital customer services, etc.

Data usage has truly gone up by 25-30% through the pandemic, but data price in addition has gone straight down significantly in the market due to hypercompetition. Therefore, despite significant upsurge in data utilization, the industry’s data income decreased by 4-5%. 

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The other section of the story is that smartphone penetration has already reached 40% at most, which explains why 60% of our earnings still originates from the voice service. The pandemic possibly managed to get difficult for the persons to recharge their phones as up to 50-70% of our recharge outlets were shut at some time during the crisis. 

Many users from the marginalized community halted recharging as they had to lessen on costs to survive. All these pandemic realities intended our revenue dipped 15-20%.

In this context, the spending plan created additional pressure for both customers and operators. Hiking of supplementary duty was the last thing we wanted right now.

When does Robi intend to get listed in the currency markets?

We have applied for the approval from the Bangladesh Securities and Exchange Commission (BSEC) to enter the administrative centre market through an initial public giving (IPO). However, we've placed two needs to the National Table of Revenue and the Ministry of Financing as pre-conditions to our entry into the currency markets. 

Among the demands is to lessen minimum turnover taxes from 2% to 0.75% like other sectors. The different demand is to reduce our corporate taxes from 45% to 35% and preserve it valid for a decade. If we get yourself a positive response against these two demands, we will be very happy to receive enlisted in the currency markets.

What's your advice on building the country's telecom sector sustainable and playing an effective role found in the country's overall market?

We need to quickly discover a way to make sure the operators can include everyone in the united states under the fold of digital connectivity. For that we must ensure cost-effective smartphones for everyone. As well, we need to have a completely fresh go through the existing taxation composition for the telecom sector. If we continue steadily to best the global chart in getting the highest taxation composition, we will not manage to generate Digital Bangladesh possible for all.

The cost of key recycleables like spectrum, optical fiber, tower operations, and import cost of telecommunication equipment are one of the highest on the globe in Bangladesh. Everybody knows that we don't have enough spectrums for the reason that spectrum value is too high. If we had been to get the spectrum we have to ensure the product quality customers need, the info price will rise to a level which will be beyond the affordability of a sizable portion of the existing data users. The account is not so numerous for optical fiber and tower management. Moreover, tax duty for importing any telecommunication apparatus is no less than 25%, which is much too high compared to any other sector.

We all know how exactly to solve the problems at hand, we just need the government’s Digital Bangladesh perspective and the tax insurance policy on the telecom sector to come to a basic understanding. The cellular operators are prepared, able, and wanting to do the rest.
Source: https://www.dhakatribune.com

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