If implemented, total tax burden on mobile phone users will be around 56.3%
The government's move to raise the supplementary duty (SD) on mobile talk time and internet services has sparked outrage among mobile operators, consumers, and digital service providers.
The National Board of Revenue (NBR) is all set to increase the SD from 20 percent to 23 percent, just six months after increasing it from 15 percent to 20 percent, which experts view as a constraint for the industry.
Currently, customers pay Tk 138 for Tk 100 worth of mobile voice or internet services, factoring in 15 percent VAT, 20 percent SD, and a 1 percent surcharge.
When additional taxes, such as revenue sharing and minimum taxes, are included, the total tax burden surpasses 54 percent, one of the highest in the world, according to industry experts.
If implemented, the proposed hike will raise this figure to around 56.3 percent, further straining consumers and the industry.
Leading stakeholders of the telecom industry have criticized the 3-percentage-point supplementary duty hike.
The secretary general of the Association of Mobile Telecom Operators of Bangladesh, Lt Col Mohammad Zulfikar (retd), believes that further tax increases, amid the country's ongoing economic challenges, will undoubtedly harm both the mobile industry and its subscribers.
"The sector is already burdened with heavy taxes and duties. In recent months, nearly six million subscribers have left the network, signalling the sector's declining growth. This decision could severely impact the government's revenue generation from the sector."
"We urge the authorities to reconsider the consequences and avoid imposing such burdens."
Bdjobs CEO Fahim Mashroor said that mobile phone users in Bangladesh already face the highest tax burden among all Asian countries.
The additional 3 percentage-point hike in tax will further escalate data costs for 90 percent of the country's internet users, potentially tarnishing the government's pro-youth image, he said.
"At the recent D8 Summit, the chief adviser highlighted the transformative role of the internet and AI in education and healthcare. But certain bureaucrats within the NBR seem disconnected from this progressive vision."
The rising internet prices may provoke discontent among Generation Z, who have previously used the internet to challenge restrictive governance, he added.
"This decision risks alienating a key demographic and fueling further unrest."
Pathao CEO Fahim Ahmed said the decision to raise supplementary duty on mobile top-ups is short-sighted.
Bangladesh already has the highest telecom taxes in the region, which limits internet adoption, he said.
"As the largest consumer tech platform in the country, we have observed how high costs constrain our market potential to just a fraction of what it could be."
The decision made by the interim government — which was expected to introduce reforms after taking charge six months ago — is taking us in the opposite direction, he said.
"We urgently call for its reversal."
Banglalink Chief Corporate and Regulatory Affairs Officer Taimur Rahman opined that the increased supplementary duty would raise talk time expenses, further reducing affordability for customers already struggling with inflation.
Telecom services have been instrumental in driving the country's economic growth and fostering digital inclusion, he said.
"The supplementary duty was increased just a few months ago, creating challenges for both the industry and its users. This move risks widening the digital divide, hindering sector growth, and reducing government revenue."
"We strongly urge the government to reconsider this decision to ensure sustained economic progress and the advancement of digital inclusion," he said.
Bangladesh Mobile Phone Consumers' Association President Mohiuddin Ahmed views the NBR's actions as a reflection of a troubling authoritarian approach.
"Such reckless decisions bear the hallmarks of a bygone fascist regime. With 48 percent of the population still without internet access, this excessive taxation will only exacerbate the digital divide," he said.
Unless the government abandons this irrational and oppressive policy, citizens and consumer groups will have no choice but to take to the streets, Ahmed said.
"It is really unfortunate to see that the taxation regime for the telecom sector continues to defy rational thinking," Robi Chief Corporate and Regulatory Officer Shahed Alam said.
While there are sustained calls for price reductions, the prospect of additional tax burdens on consumers sends a contradictory and confusing message, he said.
"Time and again, we have seen that increasing consumer tax burdens in the telecom sector leads to reduced spending by mobile phone users. This, in turn, negatively impacts the financial health of mobile phone operators and decreases government revenue."
While mobile operators face financial struggles, expectations regarding service quality continue to rise, he said.
"How can operators invest in next-generation networks if we are being systematically weakened by a taxation regime that clearly lacks purpose and direction?" he questioned.
