Call to Reconsider Tax on Mobile Recharge to Ensure Digital Inclusion

High tax rates in Bangladesh’s telecommunications sector are creating significant barriers to digital inclusion and technology adoption, according to industry stakeholders. They warn that one of the world’s highest tax rates on mobile recharge is putting additional pressure on consumers, which could ultimately challenge the country’s goal of building a “new Bangladesh.”

One-Third of Mobile Recharge Goes as Tax

Presenting the taxation structure on mobile services, Taimur Rahman said that when a customer recharges Tk 100, nearly Tk 34 is deducted as tax.

He said, “Maintaining such a high tax rate makes it difficult to expand digital inclusion. In particular, the cost of mobile services is becoming increasingly burdensome for low-income users.”

Uneven Competition and Policy Challenges

The discussion also highlighted concerns over uneven competition between global OTT platforms and local telecom operators. Speakers noted that while local operators operate under strict tax and regulatory frameworks, global platforms face comparatively lighter oversight. Taimur Rahman said this imbalance is weakening the competitiveness of the local digital sector and creating uncertainty in the investment environment.

Risks to Digital Growth

Participants at the roundtable warned that high taxes on mobile services are directly increasing user costs, which in turn is affecting internet adoption and the expansion of digital services.

They cautioned that this could slow the growth of Bangladesh’s technology-driven economy.

Call for Policy Reform

Speakers emphasised the need to simplify the tax structure and introduce policy reforms. They argued that instead of raising tax rates, expanding the tax base and improving administrative efficiency would be a more effective long-term solution.

The discussion concluded that achieving a sustainable digital economy requires a balanced approach to taxation and regulatory frameworks.