A promising industry growing out of over-the-top (OTT) platform, still in its infancy in Bangladesh with an average lifespan of just four to five years, faces a major new challenge as the government proposes a 10-percent supplementary duty in the 2025-26 budget. The announcement, pronounced by Finance Adviser of the interim government Dr Salehuddin Ahmed during his televised budget speech, has sparked serious concern among industry-insiders who fear the fiscal measure may stymie the growth of the domestic digital entertainment sector.
At a time when local platforms such as Chorki, Bongo, Toffee, Bioscope and Binge have been steadily building a market presence against formidable global competitors, the imposition of this additional tax threatens to disrupt the fragile balance these startups have carefully cultivated.
The supplementary duty or SD happens to come on top of the existing tax obligations already weighing heavily on the sector. Currently, Bangladeshi OTT platforms pay a 2.0-percent advance income tax (AIT) and a 15-percent value-added tax (VAT). The cumulative effect of these levies is expected to increase subscription costs, potentially deterring new subscribers and triggering cancellations among existing ones.
Redoan Rony, CEO of Chorki, voices his alarm: "The entertainment industry is already struggling. If this duty is implemented now, we will not be able to stand." His sentiment reflects the anxiety running through the industry as it grapples with this latest policy development.
Uneven playing field with global giants: A key frustration for local OTT operators lies in what they perceive as an uneven regulatory and tax environment. While the proposed budget defines OTT services and brings local platforms under the new tax regime, global streaming giants such as Netflix, Amazon Prime, SonyLIV, Hoichoi, and Zee5 operate largely outside Bangladesh's fiscal reach. Although some reports suggest Hoichoi may come under certain local taxes, its primary operational base remains outside the country, complicating tax enforcement.
These international companies attract millions of Bangladeshi viewers, yet their revenue streams within the country often remain untaxed or loosely regulated. This disparity, industry insiders argue, severely undermines the competitive capacity of local platforms that lack the financial muscle and extensive content libraries of their global counterparts.
Content creation under threat: The financial strain resulting from the additional tax burden is likely to have a direct and damaging effect on content production. With a growing share of their revenues redirected towards taxes, domestic OTT platforms will have fewer resources to invest in the production of original films, dramas and web series.
For many Bangladeshi creators, the ability to tell local stories that reflect the country's culture and social realities has been one of the defining characteristics of homegrown platforms. However, as production budgets shrink, both the volume and quality of content could decline. This, in turn, threatens not only the creative sector but also the livelihoods of countless actors, writers, directors, technicians and crew members who depend on the industry for employment.
Filmmaker Ashfaque Nipun cautions that the additional tax could cripple the industry, which is already fighting against rampant piracy. "Budgets will decrease and new subscriptions will be discouraged. We are already struggling; now this decision will make it even harder to survive," he laments, urging the government to review the decision.
Global context: balancing growth and regulation: Bangladesh's move to tax OTT services reflects a broader global trend as governments seek to capture revenue from the rapidly expanding digital economy. However, approaches to taxing OTT services vary significantly worldwide, with many countries experimenting with Digital Services Taxes (DSTs), sales taxes, and content regulations tailored to their domestic markets.
While Bangladesh's decision may be aligned with global trends, the challenge lies in ensuring that such measures do not stifle an industry still finding its footing. Without a comprehensive framework that effectively addresses the disparity between local and foreign OTT players, Bangladesh risks jeopardising the very industry it seeks to regulate.
As such, leaders within the domestic OTT and telecommunications sectors are calling for urgent discussions with policymakers to safeguard the future of the digital entertainment industry. Faisal Rahman, Head of Marketing and Business Development at Chorki, warns that the tax would inevitably affect subscription prices, discouraging potential subscribers and slowing growth. "Such a decision is alarming for the entire industry."
Echoes Gazi Towhid Ahmed, Head of Corporate Communications at Banglalink, which operates the OTT platform Toffee. "An additional 10-percent supplementary duty on OTT services is deeply concerning, especially when it comes to Bangladesh's digital progress. If this decision is implemented, it will make digital entertainment and information services more expensive for millions of users, particularly in low-income and rural communities," he says.
He further argues that such a move contradicts the government's stated vision of ensuring broad-based access to information. "It will increase the digital divide and limit people's freedom of choice in content consumption. We urge the government to reconsider and engage in dialogue with industry stakeholders."
Such deemed fiscal flaw stands a young industry at a crossroads. Redoan Rony of Chorki sums up the gravity of the situation: "The OTT industry has just started in Bangladesh and it has great potential. Since the arrival of OTT, the appeal of local content and movies has grown significantly. Viewers at home and abroad are watching and appreciating Bangladeshi content."
He sounds upbeat about the emergence of a new forex earner for Bangladesh with this industry nurtured to flourish. He says OTT could evolve into a significant foreign-exchange earner for the country. "But, before such a promising industry can take off, it is being made difficult to move forward by imposing taxes. This will put immense pressure on both the industry and the audience. This is a matter of great concern at such an early stage."
For Bangladesh's young OTT industry, the government's final decision in the coming weeks may well determine whether it emerges as a robust cultural and economic force or faces an untimely stagnation under the weight of excessive taxation.
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