The Financial Express

Direct carrier billing: Mobile operators seek lower taxes

| Updated: February 14, 2020 15:31:35

Evaly and Fianancial Express Evaly and Fianancial Express
Picture used for illustrative purpose only — Collected Picture used for illustrative purpose only — Collected

Customers have to pay an additional 11 per cent for money transfer through direct carrier billing, though uses of other channels cost less, industry insiders said.

This type of billing allows mobile phone users to make online payments, but operators find charges to be discriminatory.

For the transaction of Tk 100 through direct billing, a user has to pay an extra Tk 27, including supplementary duty and surcharges for the payment via cellphone operators.

However, the direct billing has yet to be a popular method for online payment since its approval by the central bank in 2018 owing to higher costs and the transactions' lower limit.

However, mobile financial services such as bkash, rocket and different cards of banks are exempted from this tax, according to an analysis of mobile phone operators.

Mobile network operators are selling prepaid telecommunication products and services with total duty of 27.50 per cent, including 10 per cent SD, 15 per cent VAT and 1.0 per cent surcharge.

Against this backdrop, the Association of Mobile Telecom Operators of Bangladesh, Amtob, has recently pleaded the National Board of Revenue, or NBR, for creating a level-playing field.

The association demanded an adjustment process for taxes on such billings.

Talking to the FE, Amtob secretary-general SM Farhad said the price for money transaction should be similar irrespective of the payment method.

The penetration of mobile phone is higher than those of other services and the operators offer the facility to a large number of people, he said.

Currently, mobile operators cover around 90 per cent of the population.

During the last budget, tax incidence for mobile phone operators was increased, making the discrimination more pronounced, he added.

He said the operators would sit with the revenue board shortly to discuss the issue.

In a letter to the NBR chairman, the Amtob said mobile network operators can play a crucial role in digitising payments for various electronically-consumable services using mobile airtime balance.

Currently, mobile money transfer services are provided by financial institutions and providers such as bKash, Rocket and Ucash.

"Given the substantial subscriber base, we hope to implement seamless payment throughout the country," it said. VAT is adjustable with the actual payables while SD and SC are non-adjustable, which pushes up costs.

Currently, four mobile phone operators--Grameenphone, Robi, Banglalink and Teletalk-are direct carrier billing services for the purchase of mobile applications and digital content through using their mobile airtime.

According to the Bangladesh Bank (BB), the maximum limit for the direct billing is Tk 600 per transaction up to Tk 3,000 per year.

Shahed Alam, chief corporate and regulatory officer of Robi Axiata Limited, said the true spirit of digital transformation of the country is to facilitate citizens to avail all information and services electronically.

The decision of the Bangladesh Bank and telecom regulator to increase the limit of direct carrier billing from Tk 50 to Tk 600 has enabled the capacity of customers to purchase mobile applications and digital contents using their mobile airtime, he said.

This step has also boosted the confidence of local app developers to develop high-end applications as they can now monetise their applications, he said.

[email protected]


Share if you like