Budget FY27: Govt proposes withdrawal of tax on SIM card
Officials argue that despite the revenue loss, the policy shift is aimed at expanding the digital ecosystem and increasing long-term tax bases through higher mobile penetration, data usage, and ICT-driven economic activity.
The government is set to withdraw the Tk300 tax imposed on mobile SIM cards as part of broader efforts to support the growth of the information and communication technology (ICT) sector and make mobile services more affordable for the general public.
The proposal has been placed in the upcoming national budget for FY2026-27 presentated in parliament today (11 June).
The move is expected to reduce the overall tax burden in the telecom sector currently estimated at nearly 50% and improve access to mobile connectivity across the country.
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Under the proposal, the Tk300 levy on each mobile SIM will be fully abolished. Policymakers believe this will directly lower entry and usage costs for mobile subscribers, particularly in low-income and rural segments where affordability remains a key barrier to digital inclusion.
However, the decision is projected to have a significant fiscal impact. According to estimates, government revenue may decline by around Tk1,200 crore in the next fiscal year due to the removal of the tax.
Officials argue that despite the revenue loss, the policy shift is aimed at expanding the digital ecosystem and increasing long-term tax bases through higher mobile penetration, data usage, and ICT-driven economic activity.
At present, the telecom sector carries one of the highest tax burdens in Bangladesh, with an effective tax rate of around 57%, while the ICT sector faces roughly 25% taxation both significantly higher compared to many peer economies.
Industry stakeholders have long maintained that high taxation on telecom services discourages usage growth and limits digital expansion, particularly at a time when mobile connectivity is increasingly linked to financial inclusion, education, and e-governance services.
If approved, the new policy will take effect from 1 July 2026, potentially marking one of the most significant tax rationalisation measures in the country's telecom history.
Taimur Rahman, chief corporate and regulatory affairs officer of Banglalink, said, "We welcome the government's initiatives to support the telecommunications sector, including the recognition of telecom as a national thrust sector and the reduction of certain taxes. These measures will help accelerate digital inclusion, attract investment, and further advance the country's digital transformation.
"The vision to increase the ICT and telecom sector's contribution to GDP to 10% within the next five years reflects Bangladesh's strong digital ambitions. Banglalink is committed to supporting this journey and creating a better life for all through connectivity and technology."
