Bring down corporate tax rate to reasonable level: mobile operators

The request comes amid the government’s decision to scrap the Tk 300 tax on mobile SIM cards

The government has proposed abolishing a long-standing tax of Tk 300 on mobile SIM cards, a move welcomed by telecom operators, who demanded further reduction of corporate tax to a ‘reasonable level’.

Finance Minister Amir Khosru Mahmud Chowdhury announced the measure while presenting the national budget for the 2026-27 fiscal year on Thursday, saying the government would also pursue broader reforms of tax, value-added tax (VAT) and licensing policies in the information and communications technology sector.

"At present, the tax burden in the telecommunications sector is around 50 percent, while in the information technology sector it is about 25 percent. These rates are significantly higher than those in many other countries," the minister said in his budget speech.

"As part of our efforts to make mobile services more accessible to the public, I propose the complete withdrawal of the 300 taka tax imposed on each mobile SIM card," he said, adding that the move would reduce government revenue by about Tk 12 billion in the next fiscal year.

The Association of Mobile Telecom Operators of Bangladesh (AMTOB) welcomed the decision but urged the government to reduce sector-specific taxes.

AMTOB Secretary Mohammad Zulfikar said replacing the fixed SIM tax with a standard value-based VAT system was a timely initiative.

"Under the new arrangement, the existing specific tax on SIM cards will be withdrawn and a 15 percent VAT will be applied on the sale price instead," he said.

"We believe this change will help bring nearly 40 percent of the population, who remain outside telecommunications services, into the digital ecosystem and accelerate the country's digital progress."

Zulfikar also called on the government to reduce the tax burden on consumers, lower corporate tax rates to a more reasonable level, remove VAT on spectrum fees and abolish supplementary duties imposed on over-the-top (OTT) services.

"We hope the government will carefully consider these issues and adopt a more balanced and effective policy framework to make the telecommunications sector more dynamic and inclusive," he said.

Leading mobile operator Grameenphone also welcomed the proposed SIM tax withdrawal while calling for broader reforms to the industry's tax structure.

"The proposed removal of the SIM tax is a positive step that will help bring more people into the digital ecosystem, reduce the digital divide and accelerate digital inclusion," said Tanveer Mohammad, Grameenphone's chief corporate affairs officer.

He also praised the government's initiative to introduce a five-year tax rate framework, saying it would provide greater predictability and certainty for investors.

However, he said many sector-specific tax rates had remained disproportionately high for years and that maintaining them without adjustment offered little relief to heavily taxed industries.

"A roadmap for gradually reducing corporate income tax and supplementary duties could have been an effective approach for both the government and the telecom sector," he said.

"Such measures would strengthen the investment climate and encourage greater foreign direct investment (FDI)."

Grameenphone urged the government to review the existing tax structure for the telecom industry and consider additional reforms.

Another mobile operator, Robi Axiata, described the government's move as forward-looking.

"We welcome the proposal to withdraw the SIM tax in the national budget," said Shahed Alam, Robi's chief corporate and regulatory officer.

"The removal of the SIM tax will help bring in the roughly 40 percent of the population devoid of digital connectivity, increasing their access to education, healthcare, financial services and economic opportunities."

Regarding the finance minister’s statement that the government would lose Tk 12 million in revenue due to the withdrawal of the SIM tax, Alam said that the expansion of digital connectivity would generate broader economic benefits.

"While the government may experience some short-term revenue loss, increased connectivity will significantly boost the use of mobile and digital services as well as overall economic activity," he said.

"In the medium and long term, the additional revenue and economic benefits generated by this growth will far outweigh the initial revenue loss."

Unlike some other industry players, Robi did not call for reductions in corporate taxes or other duties.