Mobile telecommunications have become the backbone of digital transformation, powering financial services, e-commerce, digital government, education platforms, telemedicine, and a wide array of online services.
For millions of citizens — particularly in rural areas — mobile internet is the primary gateway to the digital world.
However, despite the sector’s pivotal role in national development, telecommunications in Bangladesh operate under one of the highest tax burdens among service industries.
Multiple layers of taxation, including corporate tax, value-added tax, supplementary duties, and regulatory charges, significantly increase the cost structure of the sector.
Digital inclusion is often framed as a social policy aimed at ensuring equal access to the internet. In reality, it is increasingly recognised as a critical pillar of economic development.
Affordable and widespread connectivity enables individuals to participate in the digital economy, access financial services, improve productivity, and benefit from digital public services. Countries that successfully expand internet access typically experience stronger economic growth, increased innovation, and greater social mobility.
Bangladesh’s thriving mobile financial services ecosystem—led by platforms such as bKash, Nagad, and Rocket—relies heavily on affordable mobile connectivity. When connectivity costs rise due to taxation, the broader digital economy risks slowing down.
The telecom sector in Bangladesh faces a unique fiscal environment where sector-specific taxes are significantly higher than those applied to most other industries.
Among regional peers, Bangladesh’s mobile operators shoulder the steepest corporate tax burden — 45% for non-publicly traded companies and 40% for publicly traded ones — a rate roughly 80% above the regional average.
By comparison, India levies 35%, Pakistan 29%, and ASEAN economies typically fall between 20% and 25%, leaving Bangladeshi operators at a pronounced competitive disadvantage.

The disparity is even sharper when set against the country’s own general corporate tax rate: mobile sector rates run approximately 78% higher for publicly traded companies and around 64% higher for non-publicly traded ones.
With a mobile internet tax rate of 39%, Bangladesh ranks among the highest in the region, far exceeding rates in Nepal (26%), Sri Lanka (23%), and India (18%). At the same time, the average inflation rate in 2025 in the regional peer countries is 2.25%, whereas in Bangladesh, the figure is significantly higher at around 10%.
The consumers and the industry are directly impacted by the heavy tax burden. Of every Tk100 top-up, roughly Tk55-56 goes to the government through two layers of taxes and charges — first Tk27-28 upfront via VAT and duties, then another Tk27-28 through revenue sharing and regulatory fees — leaving operators just Tk43-44 to run networks, expand infrastructure, and serve customers.
This elevated tax structure carries consequences well beyond government revenue. With a significant share of income absorbed by taxes and levies, operators have little room to lower consumer prices, keeping affordable connectivity out of reach for millions.
The same fiscal pressure shrinks the resources available for network expansion, slowing coverage growth in the communities that need it most.
Bangladesh’s smartphone penetration stands at roughly 72% at the household level, and the figure is significantly lower at the individual level, while nearly 42 million people—mostly in rural communities—do not subscribe to internet packages.
Around 62 million Bangladeshis (35%) still do not own a mobile phone, and approximately 31 million existing users continue to depend on basic phones due to the high cost of mid-range smartphones.
For many low-income households, upgrading to a smartphone remains financially unrealistic, posing a major barrier to digital inclusion.
The digital divide in Bangladesh is multi-dimensional: it cuts across urban-rural geography, income groups, and gender. Economic barriers to device ownership interact with social constraints on women’s technology use, creating compound exclusion—precisely for the group that stands to gain most from digital tools such as health information, remote income generation, and financial services.
In the labour market, as the garment sector moves toward Industry 4.0 automation, workers without digital skills face structural displacement.
As Bangladesh moves toward a knowledge-based and digitally empowered economy, aligning telecom fiscal policy with national connectivity goals will be crucial. The following immediate steps would make the largest difference.
First, mobile internet should be reclassified as an emergency and essential service and removed from the Supplementary Duty framework—the same logical move that exempts basic food and medicine from luxury levies.
Second, the remaining telecom tax burden should be gradually reduced in line with global and regional benchmarks, with reductions explicitly linked to operator commitments to expand rural coverage.
Third, duties on entry-level smartphones should be lowered to remove the device barrier that keeps millions of potential first-time users offline.
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Mohammad Zulfikar is a telecom and technology expert, former regulator and ex-military officer