Budget provides little support to telecom sector: Experts

Industry leaders and technology entrepreneurs have voiced their concerns that Bangladesh's national budget for FY 2026-27 has provided little relief to the country's telecommunications sector.
They also warned that several fiscal measures could discourage investment, slow digital inclusion and leave consumers without tangible benefits despite generous tax concessions for mobile operators.
The concerns and observations came at a seminar titled 'Impact of the National Budget on the Telecommunications and Technology Sectors', which was organised by the Technology Industry Policy Advocacy Platform (TIPAP) and Voice for Reform at the BDBL Building in the capital on Wednesday.
Participants said the budget remains silent on the continuation of the software industry's tax exemption beyond acknowledging its validity until 2027, creating uncertainty for software companies.
They also expressed concerns over the existing higher import duties on smartphones despite reduced duties on laptops, arguing that the overall budget offers little comfort for the telecommunications industry.
Telecommunications expert Mahtab Uddin Ahmed said the government's decision to abolish the Tk 300 tax on new mobile SIM cards would reduce government revenue by around Tk 12 billion annually but the financial benefit would accrue almost entirely to mobile operators rather than consumers.
He said operators spend around Tk 500 to Tk 550 to acquire each new subscriber, of which Tk 300 had been the SIM tax. With the tax removed, operators would save roughly Tk 250 to Tk 300 per SIM.
"I support the withdrawal of the SIM tax. It is a positive decision. But if the government had instead reduced the supplementary duty on internet usage, consumers could have directly benefited," he said.
According to Mr Ahmed, mobile subscribers currently pay nearly Tk 39 in taxes for every Tk 100 spent on telecommunications services, making consumers the largest taxpayers in the sector.
He noted that the latest budget also abolished the 2.5 per cent withholding tax on operators' revenue sharing and reduced tax on network services from 12 per cent to 10 per cent, arguing that these measures would primarily improve operators' profitability rather than lower prices for users.
Around 70 per cent of total taxes generated by the telecommunications sector ultimately come from consumers and suggested that the share could rise to between 85 and 90 per cent under the new fiscal framework, he mentioned.
Mr Ahmed also argued that Bangladesh continues to lag behind many South Asian countries in mobile data affordability, saying that reducing consumers' tax burden should have been a higher policy priority.
Delivering the keynote presentation, TIPAP Convener FahimMashroor warned that imposing heavier tax burdens on smartphones in an effort to encourage local manufacturing could ultimately slow Bangladesh's digital transformation.
He said smartphones have become the principal computing device for millions of people and, with the advances in cloud computing and artificial intelligence, are increasingly used for office work, document preparation and other productive activities.
Mr Mashroor welcomed the proposed Tk 5.0 billion Startup Fund announced in the national budget, saying incentives for startups were a positive initiative.
He, however, raised a question as to whether genuine entrepreneurs would actually be able to access those benefits or not.
"We want the incentives to reach real and new entrepreneurs. Lessons from previous experiences should be incorporated so there is no scope for misuse," he said.
Speaking at the seminar, Dream71 Managing Director Rashad Kabir alleged that many information technology companies are forced to spend between Tk 80,000 and Tk 150,000 unofficially to obtain tax exemption certificates from the National Board of Revenue (NBR).
Although software companies are legally entitled to have tax exemptions under government notifications, he said many banks, multinational companies and other clients require NBR certificates before making payments.
"If companies want the certificate quickly, they have to pay. Otherwise, they may have to wait for months while repeatedly being asked for additional documents. It is an open secret within the industry," Mr Kabir alleged.

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