The Bangladesh Telecommunication Regulatory Commission (BTRC) has proposed a substantial reduction in taxes on new SIM (Subscriber Identity Module) issuance, as high costs are slowing subscriber growth and the expansion of the telecom sector.
It has also called for the complete withdrawal of taxes on replacement SIMs and Internet of Things (IoT)/Machine-to-Machine (M2M) SIMs in an internal communication sent to the Ministry of Posts, Telecommunications and Information Technology.
The proposals were outlined in a memo issued recently by the BTRC's Systems and Services Division and addressed to the secretary of the Posts and Telecommunications Division.
The recommendations were made following a high-level meeting last month chaired by the Prime Minister's Telecommunications and ICT Adviser Rehan Asif Asad, who holds the rank of a state minister.
Senior officials from the Posts and Telecommunications Division, the National Board of Revenue (NBR), BTRC and other agencies attended the meeting.
In the memo, the regulator said reducing SIM-related taxes is essential to expand the telecom sector, improve digital connectivity and stimulate economic activity by lowering consumer costs.
It noted that mobile operators currently spend around Tk 700 to activate a new subscriber connection. Of this, Tk 300 goes as SIM tax, around Tk 50 covers SIM kits, while the remaining Tk 350 is spent on operations, distribution and other charges.
According to the BTRC, operators effectively subsidise nearly half of the acquisition cost when selling SIMs to users, with about 43 per cent of the total cost going directly as non-refundable tax to the government.
The memo highlighted a mismatch between acquisition costs and earnings, saying the average revenue per user (ARPU) stands at Tk 130-150 per month. As a result, operators typically need around five months to recover the cost of acquiring a new customer, which may extend to six to nine months in many cases.
The regulator warned that high acquisition costs are discouraging new subscriber growth and creating barriers to market expansion.
It also noted that only a few countries, including Jamaica and Ghana, impose separate taxes on SIM issuance.
The BTRC further recommended scrapping taxes on replacement SIMs, arguing that these do not create new connections but merely restore existing numbers.
It said consumers have already paid SIM tax at the time of original issuance, and charging again during replacement amounts to double taxation.
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