Experts want tax cut in telecom sector, The Independent, February 13, 2013

Date: 12 February 2013

DHAKA, FEB 12: Leading telecom experts on Tuesday stressed the need for a liberal and flexible taxation system for the telecom sector to attract foreign investment. They were speaking at a discussion, “Future of the telecom sector in Bangladesh and its Contribution to the Realization of Vision 2021”, organised by the Bangladesh Enterprise Institute (BEI) at a city hotel. They said excessive taxation and strict regulatory framework would harm the growth of the sector. Post and telecommunication minister Sahara Khatun, chief guest of the event, said: “The government has been working relentlessly to fulfill its election pledge to implement its goals for a ‘Digital Bangladesh’. The targets are supposed to be achieved much before 2021, the stipulated timeframe.”

Highlighting different achievements of the government during the last four years, the minister said: “The tele-density has increased up to 65 per cent from 32 per cent. Use of the Internet has increased from 3 per cent to 27 per cent. Different services in the telecom sector has made the whole world a global village, of which Bangladesh is a significant part.”

Information minister Hasanul Haq Inu said the current tax on mobile phone services is too high. “Fifteen per cent tax on Internet use is not an encouraging sign. Mobile phone operators can go to court to oppose this. I’ll raise the issue of reforming the current taxation policy, as well as the existing tax structure before the cabinet to make the telecom and IT services affordable to all,” he added.

Information and communication technology minister Mostafa Faruque Mohammad said the government will set up software technology parks in every district to promote the ICT sector. “Such initiatives will encourage the inflow of foreign direct investment into the country,” he added.

BEI president Farooq Sobhan said the telecom sector’s contribution in bringing in revenue is significant after the garments industry and expatriate earnings. “To promote this sector, we should arrange consultations and debates with stakeholders. Excessive taxation and regulatory affairs can kill the goose that lays golden eggs,” he added.

Nazrul Islam Khan, secretary in the information and communication technology ministry, said: “The country can’t progress further without creating a strong data network. Over 2,000 government offices will have Internet facilities. Our endeavour to spread the Internet service to every corner of the country has become successful.”

Sunil Kanti Bose, chairman of the Bangladesh Telecommunication Regulatory Commission, BTRC, said the commission has set 1 mega-bits per second (Mbps) as the standard broadband Internet speed, a significant improvement from the previous 128 kilo-bits per second (Kbps). “The present government’s vision of a ‘Digital Bangladesh’ is only possible through countrywide broadband connectivity,” he added.

Michael Kuehner, president of the Association of Mobile Telephone Operators of Bangladesh, AMTOB, said the sector has also created job opportunities for 1.5 million people. In the last 10 years, cellphone operators have invested over Tk. 10,000 crore in the sector and given Tk. 9,000 crore to the government exchequer and only Tk. 119 crore to their shareholders, he added.

Ifty Islam, managing partner of the Asian Tiger Capital, said: “The telecom sector is one of the overwhelming success stories of the country. The number of mobile subscribers has grown beyond our expectation.”

Earlier, speaking at the event as the keynote speaker, Rohan Samarajivam, founding chair of the LIRNEasia, a Colombo-based regional think-tank, said though Bangladesh has done extremely well in voice services, its Internet penetration level is still not up to the mark. “However, the credit of 26 per cent Internet penetration should go to easy availability of mobile phones and wireless cyber networks,” he added.