High taxes hampering digital growth, telco investment: Banglalink CEO

Bangladesh should lower telecom taxes and expand digital participation, Johan Buse, chief executive officer of Banglalink, has said, arguing that sustainable government revenue growth depends on broadening the tax base rather than imposing higher taxes on existing taxpayers.

In a recent interview with The Business Standard, Johan said Bangladesh possesses the scale and economic potential to become one of the region's leading digital markets, but warned that high taxation and structural barriers are slowing digital adoption and constraining long-term investment in the telecommunications sector.

"Lower barriers lead to broader participation, stronger investment, and ultimately higher long-term revenue generation."

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Describing connectivity as the backbone of a modern economy, he said continued investment in communications infrastructure would be critical for maintaining competitiveness and supporting economic transformation as Bangladesh's GDP approaches $500 billion.

He pointed to countries including South Korea, China, Pakistan and Singapore, where sustained investment in digital infrastructure accelerated productivity, industrial growth and innovation.

Banglalink, a subsidiary of VEON, has invested more than $2.5 billion in Bangladesh over the past 21 years, including around $400 million in recent 4G network expansion. The company is also expanding beyond conventional telecom services into broader digital platforms aimed at strengthening digital and financial inclusion.

Johan described Bangladesh's telecom tax structure as significantly higher than global benchmarks.

According to him, the sector currently faces an effective tax burden of around 55%, compared with a global average of approximately 22%. Consumers, meanwhile, pay an effective tax of nearly 39% on mobile usage.

He identified the Tk300 SIM-related VAT as a major obstacle to digital adoption, particularly in a country where nearly half the population remains offline.

According to Johan, such entry barriers directly slow digital adoption, reduce participation in the formal economy, and limit the wider economic benefits of connectivity. "Greater digital adoption improves transparency and traceability across the economy, ultimately strengthening VAT and income tax collection through a broader tax base," he said.

Highlighting global examples, Johan noted that Bangladesh's tax-to-GDP ratio remains around 6.5%, among the lowest globally. He referenced Sri Lanka's increase from 8% to 15% within five years through broader participation rather than higher tax rates. 

He also pointed to Uzbekistan, where lower taxes on digital and telecom companies led to significant new investment, and Pakistan, where reduced spectrum pricing encouraged operators to acquire more spectrum, improve service quality, and expand infrastructure investment. 

"Lower barriers lead to broader participation, stronger investment, and ultimately higher long-term revenue generation." 

Johan also expressed concern over the minimum turnover tax structure for telecom operators, describing it as particularly difficult for capital-intensive industries requiring long-term infrastructure investment. 

He further highlighted the importance of a dependable power supply for digital infrastructure. 

Banglalink currently operates around 15,000 base stations nationwide, all requiring uninterrupted electricity to maintain service continuity. 

"Reliance on diesel during power disruptions significantly increases operational costs, while stable grid electricity improves efficiency, strengthens investor confidence, and supports long-term digital infrastructure growth," the Banglalink CEO said.

Discussing future-ready infrastructure, Johan said resilience, scalability, and uninterrupted customer experience are becoming defining characteristics of modern telecom networks. He highlighted Banglalink's nationwide Voice over Wi-Fi rollout aimed at improving indoor connectivity, alongside its partnership with Starlink to extend connectivity to remote and disaster-prone areas through satellite-to-mobile technology. 

According to Johan, the Starlink partnership could fundamentally reshape how connectivity is delivered in Bangladesh. By leveraging satellite connectivity, users would be able to stay connected in remote regions, at sea, or during natural disasters, even when conventional ground infrastructure is unavailable.

Beyond connectivity, he emphasised the importance of financial inclusion and digital services. He noted that nearly half of Bangladesh's population remains outside the formal banking system and argued that mobile-led financial services offer one of the fastest ways to bring underserved communities into the formal economy.

Drawing from VEON's experience in other markets, particularly Pakistan, the Banglalink CEO highlighted how digital financial platforms can rapidly expand access to financial services at scale. 

"Access to banking services should be simple, affordable, and accessible for everyone," Johan said. 

He noted that traditional banking systems are often too complex, costly, and inconvenient for many people. Referring to countries such as Singapore, China, and several Middle Eastern markets, Johan highlighted how digital banking platforms now allow users to open accounts within seconds directly from smartphones. VEON has applied for a digital bank in collaboration with local conglomerate Square. 

He added that Bangladesh could significantly accelerate financial inclusion through digital-first financial models, reducing dependence on cash, lowering transaction costs, and enabling more people to participate in the formal economy through accessible digital financial services. 

Johan also highlighted the importance of eKYC in simplifying and digitising customer onboarding. According to him, eKYC can make financial services faster, more affordable, and more accessible through mobile devices while strengthening financial transparency and supporting broader digital economic participation.

Looking ahead, Johan identified three major priorities for Bangladesh over the next several years: closing the digital divide through affordable connectivity and devices, accelerating financial inclusion for underserved populations, and building digital platforms across sectors such as healthcare, education, and agriculture.

He stressed that process simplification alongside predictable and transparent policy reforms will be essential to attracting long-term investment into the sector. 

Among the priorities Johan highlighted were balanced taxation to widen the tax base, lowering spectrum pricing to regional levels, streamlining infrastructure approvals, improving number portability systems, and introducing active sharing frameworks to increase the quality of the network and improve access, ultimately helping improve lives for everyone through digital transformation.