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CEO of ROBI Wonders Why The Minimum Tax On Cell Phones Is Higher Than The Minimum Tax On Alcohol.

Mahtab Uddin Ahmed, Managing Director and Chief Executive Officer (CEO) of the stock exchange-listed a leading mobile company Robi Axiata, asked why mobile companies tax more than wine sellers, tobacco companies and coal-fired power plants?

The CEO spoke about the proposal by Robi for the 2021-22 budget during a press conference on Wednesday. According to Mahtab Uddin Ahmed, even though mobile operators have lost revenue, they must pay income tax at a rate of 2% on the overall money received from selling the service. Liquor dealers are subject to a 0.6 % tax, copper is subject to a 1% tax, and coal power plants are subject to a 0.5 to 0.8 % tax.

“Alcohol and tobacco are health-damaging,” said Robi’s CEO. Coal power plants are environmentally harmful. Mobile phone service, on the other hand, is propelling the country’s economy forward. What did investors do wrong by investing there if their minimum tax is higher than that of alcohol and tobacco?

According to the virtual press conference, Robi’s effective corporate tax rate stands at 69 percent due to the minimum tax. This means that if you make a profit of 100 rupees, you will pay 69 rupees in income tax to the government. Robi is expected to receive Tk 8,584 crore in 2020, according to him. Tk 4,238 crore, or about 56 percent of the total revenue, goes to the government treasury. This money will be used to pay for a variety of taxes, fees, and leases. Robi’s profit in 2020 was only Tk 155 crore, despite having invested a large sum of capital.

According to Mahtab Uddin Ahmed, mobile operators must pay a 2% income tax on all money received from the selling of services. On liquor sellers, the rate is 0%, and on tobacco sellers, it is 1%. Robi’s key source of annoyance is the minimum tax. The government levied a minimum tax of 2% on mobile operators in the 2019-20 budget. In other terms,  the operator would pay a 2% income tax on the amount of money received from consumers as a result of selling the service. Benefit and loss will not be included in this situation. Grameenphone is unaffected by this levy. Grameenphone pays a higher corporate tax than the minimum tax since it raises more. Due to the minimum tax, Robi, Banglalink, and Teletalk have to suffer.

 

He said, “We are not making any special demands.” I’d like to see fairness in the tax system. Even if you lose money, paying taxes is unconstitutional.’ He claims that policymakers are aware of this. However, nothing seems to be happening.

“Rs 500 crore is not such a big deal for Axiata,” Mahtab Uddin Ahmed said, noting that Robi does not receive any additional benefits even after being registered in the stock market. On the assurances of those involved, we went to the stock market. Foreign investors, he said, are also keeping an eye on what’s going on with Robi. We make no special demands. I’d like to see justice in the tax system. Even if you lose money, you must pay taxes; this is unconstitutional.

At the press conference, it was said that foreign mobile operators doing business in Bangladesh pay the highest tax rate in the world. There are minimum taxes in a few countries, although they are flexible. This means that if you lose anything, you can get a refund. According to Shahed Alam, Robi’s Chief Corporate and Regulatory Officer, they now have to pay income tax out of their own pockets due to the minimum tax.

At the press conference, it was informed that the country’s corporate tax rate for ordinary businesses is 32.5 percent. It is, however, 25% whether it is listed on the stock exchange. Mobile operators pay a 45 percent corporate tax. Tobacco firms are taxed at the same rate. The corporate tax rate for licensed mobile operators in the capital market is 40%. Corporates in specialized industries are receiving significant discounts from the government. The textile industry, for example, has a corporate tax rate of just 12%.

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