Broadband providers seek sharp cut in equipment duties

Broadband internet providers today (13 March) urged the National Board of Revenue (NBR) to reduce import duties on essential internet-related equipment to enhance their capacity for the upcoming surge in internet demand.

Currently, major internet equipment and devices, including routers, are subject to nearly 60% in duties and taxes as they are imported. The Internet Service Providers' Association of Bangladesh (ISPAB) has proposed reducing this to 15%, said Md Emdadul Hoque, president of ISPAB.

After a meeting with top NBR officials, he told TBS, "Broadband penetration in Bangladesh is still low – not more than 12% of total internet connections. For the expected digital boost, we need all citizens to have access to high-speed internet."

He noted that the government had previously reduced import duties on dial-up routers to zero, which significantly boosted household internet penetration in the early days. A similar policy is needed now, he added.

Although the broadband industry provides IT-enabled services (ITES), the tax authority does not include it in the list of tax benefit recipients under ITES.

ISPAB, in its budget proposal for 2025-26, requested the NBR to consider them as ITES so that they enjoy the tax waiver till 2027.

Besides, the 15% advance income tax applicable in each corporate broadband connection is hurting the service providers, ISPAB said, requesting to cut it to 2%-3%.

Internet service providers in Bangladesh are set to face competition from satellite internet providers in the coming days, and competency will be key to their survival and growth, said Md Emdadul Hoque.

Without supportive policies and a favourable tax structure, fiber-based internet providers may struggle to enhance their competitiveness, he added.