The National Board of Revenue (NBR) has offered VAT exemption to the telecom operators on the amount that they pay to the regulator as revenue-sharing under the licencing provision.
The mobile phone companies share 5.5 per cent of their total revenue with the Bangladesh Telecommunication Regulatory Commission (BTRC) as per the condition of 2G and 3G licences.
In a special order issued on Thursday, the VAT wing of the NBR offered the exemption with retrospective effect from July 1, 2019.
In accordance with the order, the telecom companies will not have to pay 15 per cent VAT on the revenue-sharing amount.
Earlier, the mobile companies had to pay BTRC’s share after paying the VAT.
Imposition of the VAT on the revenue-sharing portion arises double taxation, said the order.
Earlier in 2013, the NBR had waived the VAT on revenue-sharing under the then VAT Act-1991.
However, the VAT has automatically been reinstated with the implementation of the new VAT and Supplementary Duty Act-2012 in July 2019.
It had created disputes between the telecom operators and the large taxpayers’ unit (LTU) of the VAT wing.
The LTU proposed to waive the VAT on revenue-sharing to avoid double taxation.