Mobile network operator Banglalink, a unit of Dutch telecom giant Veon in Bangladesh, has failed to pay Tk425.8 million in value-added tax (VAT) on revenue sharing between April 2012 and June 2013, prompting a firm response from the Bangladesh Telecommunication Regulatory Commission (BTRC).

The High Court has also ordered the operator to settle the dues, but Banglalink continues to contest the claim, citing a National Board of Revenue (NBR) exemption, sources confirmed to the Mirror Asia.

BTRC sent repeated letters to Banglalink—including on 22 June and 24 December, 2023, and again on 25 June, 2024—demanding payment. A separate notice, issued on 5 June, 2024, also called for the payment of VAT deducted in various sectors from April 2012 to December 2017.

Despite these communications, Banglalink has not cleared the dues, raising concerns at the regulatory body. The core of the dispute centers on whether the VAT is valid for the period before the NBR issued its special exemption order on 12 August, 2013.

Banglalink maintains that the VAT in question falls under the NBR’s double taxation exemption and is therefore not payable. However, BTRC strongly disagrees, asserting that the NBR’s special order is not retroactive.

Officials argue that the VAT claim pertains to the period before the exemption came into effect and therefore remains valid. “The claim of double taxation is not applicable in this case,” said a BTRC official. “This is a matter of due payment from before the exemption order was issued.”

According to the VAT rules, mobile operators must pay 15% VAT on services provided to customers and 5.5 percent of the post-VAT revenue to BTRC as part of revenue sharing. BTRC was initially tasked with deducting VAT at source from the revenue-sharing amount.

However, Rule 18(E) of the 1991 VAT Rules created a situation where the same transaction risked being taxed twice—once from customers and again from BTRC.

To prevent this, the NBR later exempted BTRC from collecting VAT on such payments, but only from the date of the exemption onward.

A seven-day deadline was issued in June 2024 for Banglalink to settle dues, with BTRC warning of legal action in case of non-compliance. To date, Banglalink has not made any payment.

In a statement, Gazi Towhid Ahmed, head of Corporate Communications at Banglalink, said the company remains committed to following the law.

“Banglalink fully respects local laws and regulations, ensuring complete compliance with the legal framework of the country,” he said. “The issue in question pertains to VAT on revenue sharing, which has been exempted by the NBR since 2013.”

Ahmed emphasised that the exemption was granted to prevent double taxation, and that Banglalink is in active dialogue with both BTRC and NBR. “We would like to reassure our stakeholders that we are working collaboratively with the authorities to ensure a prompt and fair resolution.”

Despite these assurances, BTRC argues that Banglalink has shown consistent reluctance to address the dues over the past decade. Officials insist that legal obligations must be fulfilled, regardless of subsequent policy changes.