Tax evasion

BTRC serves notice on GP-Robi

Bangladesh Telecommunication Regulatory Commission (BTRC) issued show cause notices to country’s two leading telecom operators, Grameenphone and Robi, for alleged tax evasion, seeking to know why their licences would not be revoked. BTRC resorted to the move against the largest and second largest mobile phone operators after several steps including partial bandwidth block and non-issuance of no objection certificates (NOC) failed to realise the Tk 13,000 crore due. After the issuance of show cause notices, BTRC Chairman Md Jahurul Haque told the media: “We issued show-cause notices against Grameenphone and Robi giving a 30-day deadline whether their 2G and 3G licenses would be revoked.”

Replying to a query, the BTRC Chairman said if they fail to pay the outstanding dues their licenses would be revoked, “butorganizations cannot be shut down that is why we would appoint administrators to run Grameenphone and Robi.” But, the next course of action  would be finalized after the 30-day deadline, he added. Grameenphone has an outstanding due of Tk 12,579 crore while it was Tk 867.24 crore for Robi, according to the BTRC’s audit. Replying to a query, the BTRC Chairman said if they fail to pay the outstanding dues their licenses would be revoked, ‘but organisations cannot be shut down that iswhy we would appoint administrators to run Grameenphone and Robi’. The notices were sent to respective mobile telecom operators on Thursday evening seeking reasons why the license cancelation will not be legal. BTRC senior assistant director Zakir Hossain Khan said the notices, served under Section 46 of Bangladesh Telecommunication Act – 2001 allows the commission to cancel licences on logical ground. Violation of licensing conditions or regulations of the commission could result in such regulatory measures. Earlier the Post and Telecommunication Ministry permitted the regulatory commission to issue the show cause notices to the mobile operators over why their licences would not be revoked for not paying the audit claims. The commission would take the next course of action based on responses from the mobile phone operators, referring to cancellation of license. Mentionable, the mobile operators have 76 percent of the country’s mobile phone subscribers under their belt. Mentionable, before the cancellation or suspension of licence of any telecom licensee, the commission has the legal binding to serve a 30-day notice seeking explanation from the licensee asking why its licence would not be cancelled for violation of licensing conditions and regulatory guidelines. The act describe that the Commission has been empowered to revoke and suspend licenses for logical reasons. If operators break rules, the commission can take such legal step. It is to be noted, on 2 April this year, the BTRC asked GP to pay Taka 12,579.95 crore in audit claims in 10 days. Of the total amount, Taka 8,494.01 crore is payable to the BTRC and Taka 4,085.94 crore to the National Board of Revenue (NBR), a BTRC-appointed audit firm said recently. In 2015, GP was accused of going back on promises they made to lure customers and then refusing to explain its fraudulent act. The operator promised its tens of millions of subscribers a minute's free talk-time to compensate for frequent call drops and then discontinued it without letting them know, clients alleged to the telecom regulator. An official of the NBR said, “The mobile operator firm GP has evaded tax amounting to more than Taka 7 crore by not paying VAT on rent of plots and buildings. The company also evaded around Taka 3,000 crore in other taxes.” NBR sources also said that the board has found evidence of tax evasion against GP. The firm evaded more than Taka 1,023 crore in taxes by showing SIM card sales and SIM replacements, added sources. In December 2017, the NBR issued a demand notice to GP, asking the firm to pay anotherTaka 378.95 crore in taxes. There are allegations that the company did not pay VAT and supplementary duty amounting to Taka 348 crore on SIM cards sold from 2006 to 2007. Adding interest, the NBR is demanding Tk 452 crore from GP. The firm had also reportedly evaded taxes amounting to Tk 100 crore and Tk 29 crore in two phases, by illegally using exemptions.