Allowing VAT exemption of the cell phone operators will increase the profit repatriation by the MNCs


We have come across that, five cell phone operators of Bangladesh including GP and Robi recently submit an application to the Ministry of Finance for a rebate on the 7.5% VAT imposed on their 2G license. Being asked for a comment on this, BTRC recommends the rebate clearly favoring the companies’ interest. On top of that, BTRC willingly appeal for an withdrawal of all the license fees and other VAT imposed on all services of the cell phone companies.

We believe, BTRC’s this kind of advocating in favor of the phone companies is conflicting with the country’s interest and this will promote the profit repatriation by the multinational companies in the name of attracting foreign investment in Bangladesh.

We are, hereby, opposing such a role of BTRC as a state institution, because:
1. The largest stake of the country’s revenue comes from the VAT and different charges paid by the cell phone companies, which is 60 to 70 billion taka (6-7 thousand crore). Actually, it is the users who pay this money through their talk-time and other usage. Therefore, rebating the VAT neither is useful for the people nor for the government. The extra profit, however, will be repatriated by the companies.
2. The government is putting stress over the internal resource collection for the current and future development planning and is trying to increase the revenue. In this situation, such a recommendation from BTRC is not only conflicting with the long-term planning for development but also seemed to be interest-driven.
3. The government has already declared to finance 70 billion taka for the upcoming Padma bridge, a big stake of which will come from the internal resource i.e. revenue. If the VAT of the cell phone companies is rebated as recommended by BTRC it’ll cause a deficit in the revenue and the promised finance for the Padma Bridge will be interrupted.
4. The phone companies still owe the government by unpaid accumulated VAT of the last years amounting nearly a thousand crore taka. Instead of helping the government in realizing the owing VAT, BTRC is advocating for the indebted companies. This is not at all expected.

Therefore, we state that, BTRC’s advocacy for the cell phone companies is hugely conflicting with the country’s interest. The National Board of Revenue has already demanded BTRC to rethink about their recommendation. We are, hereby, also requesting BTRC to reconsider their recommendations in favor of the profit making purpose of some companies over the country’s interest.

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