Fahim Mashroor, CEO of BDJobs and former president of BASIS, has called for smarter budget allocations and urgent tax reforms in Bangladesh’s ICT sector ahead of the upcoming national budget.
The veteran tech entrepreneur highlighted the country’s heavy tax burden on internet data, the stagnation of IT exports below $700 million, and the untapped potential of AI and renewable energy as key areas demanding policy attention.
In an interview with Nahiyan Ahmed of TIMES of Bangladesh, Mashroor emphasised the need to reduce supplementary duties on mobile data, develop mid- and senior-level tech talent, and expand the digital market to attract foreign investment and scale up local IT companies.
What is your primary expectation for the IT sector in the upcoming budget?
Historically, budget discussions have focused heavily on the total financial allocation or the number of major projects launched. However, I believe the quality of the allocation is far more important than the quantity. The critical factor is whether the funds are being directed toward the areas that genuinely need them. A massive budget is meaningless if it is not spent wisely. Conversely, even a smaller allocation can be highly effective if it is strategically targeted.
Do you foresee any positive changes regarding the taxes on internet data and computer hardware?
Currently, the tax burden on Bangladesh’s IT sector and digital devices remains exceptionally high, driving up the cost of data for everyday users. For example, when a consumer purchases a Tk 100 data package, roughly Tk 40 to Tk 45 goes directly to the government through various taxes and supplementary duties.
Specifically, there is a 20% supplementary duty applied to data packages, which fundamentally contradicts the purpose of such a tax. Typically, supplementary duties are reserved for luxury items or harmful goods the government wants to discourage, like cigarettes. Unfortunately, this punitive tax has been levied on internet data, a basic modern necessity, for several years.
If this 20% supplementary duty were removed, internet access would become significantly more affordable, naturally accelerating the adoption of digital services across the country. Lowering the cost of connectivity should be a top priority in the upcoming budget.
What economic benefits would a reduction in internet prices bring?
Lowering the price of the internet would unlock massive new demand across the digital ecosystem, boosting everything from software development to smartphone adoption.
While roughly 60% to 70% of the population currently uses smartphones, there is still substantial room for growth and foreign direct investment (FDI) in local manufacturing. To attract that investment, two critical steps are needed: first, stimulate consumer demand by making connectivity affordable; second, reduce the tax burden on mobile devices, which currently exceeds 40% due to various duties and levies.
Specifically, the government should slash import duties to zero on components used for domestic smartphone assembly. Combining cheaper internet with tax relief on hardware will create a thriving digital market, ultimately accelerating the adoption of cutting-edge technologies like artificial intelligence and robotics.
Which specific areas need to be addressed to effectively attract foreign investment?
Attracting foreign direct investment (FDI) is inherently challenging right now. Global investors are drawn to markets that demonstrate robust economic growth and expanding consumer demand. This is precisely where our current bottleneck lies; the overall macroeconomic situation has not yet fully stabilised.
Ultimately, foreign investment follows market scale. To draw investors in, our primary focus must be on stabilising the economy and implementing policies that stimulate domestic market growth.
What is the primary reason Bangladesh’s IT exports remain stagnant below the $700 million mark?
While neighbouring countries are scaling rapidly, with Pakistan’s IT exports approaching $4.5 billion, Sri Lanka outpacing us in tech services, and India exceeding $800 billion in total overall exports, Bangladesh lags behind largely due to a lack of international marketing scale. Competitors in these nations benefit from having massive, enterprise-level IT companies that employ 8,000 to 10,000 professionals. These large organisations possess the capital and global footprint to market themselves aggressively on a global stage.
In contrast, Bangladesh’s IT sector is highly fragmented and dominated by small firms. Currently, only about 10 to 15 local companies employ more than 1,000 IT professionals. To bridge this gap, our primary focus must be on nurturing and scaling our mid-sized companies. This doesn’t necessarily mean direct financial handouts, but rather providing robust policy support, tax incentives, and institutional backing to help them expand internationally.
What is the biggest obstacle preventing Bangladesh’s ICT sector from becoming internationally competitive?
The primary hurdle is a severe shortage of specialised, mid-to-senior level talent. While Bangladesh has an abundance of entry-level IT graduates and junior professionals, local companies struggle to scale due to a deficit in experienced technical leadership. This gap has been exacerbated by aggressive brain drain, as many senior professionals have moved abroad for better opportunities. To reverse this trend, we must create structured upskilling programmes, such as international training partnerships, and introduce incentives that encourage non-resident Bangladeshi tech experts to return or work remotely with local firms.
Compounding this talent issue, public policy over the last few years has favoured basic freelancing over long-term enterprise building. In the rapidly evolving era of artificial intelligence (AI), many routine, freelance-dependent tasks will inevitably be automated, threatening millions of low-tier digital jobs. To secure global competitiveness, the ICT sector must pivot toward an innovation and product-based ecosystem where local companies leverage AI to build proprietary software, hardware, and scalable platforms.
Artificial intelligence is reshaping the global job market. What specific types of jobs are seeing a shift in demand within Bangladesh?
AI will likely not cause an immediate, widespread disruption to Bangladesh’s broader job market; a profound macroeconomic shift is more realistic in the next five to seven years. Because a massive portion of our economy relies on labour-intensive manufacturing, the immediate impact on core employment remains insulated. However, the footprint of AI is already visible in knowledge-based sectors – particularly in digital marketing agencies, content creation, and media, where routine writing, design, and analysis tasks are rapidly evolving.
While the structural shift will take time to mature, local businesses cannot afford to wait. Companies must initiate the strategic integration of AI tools now. Far from just a threat, this transition offers a tremendous opportunity to drive operating efficiency. By leveraging AI, organizations can exponentially increase output and boost profit margins at the same cost basis. To remain competitive, embracing AI is no longer optional.
To secure venture capital, Bangladeshi startups are often forced to establish offshore holding companies. What regulatory steps can the government take to address this challenge?
This regulatory bottleneck is a long-standing reality for Bangladesh’s ecosystem, primarily because the vast majority of venture capital must be sourced internationally. To mitigate this, Bangladesh Bank recently introduced progressive measures allowing local founders to register offshore entities without transferring physical capital abroad. However, foreign exchange and outbound investment regulations remain rigid. The central bank needs to further streamline these compliance frameworks to make international fundraising friction-free for founders.
Concurrently, the domestic capital landscape is beginning to mature. We are seeing a welcome influx of local liquidity, including a new venture capital fund backed by a consortium of commercial banks, alongside equity support from development partners like the Japan International Cooperation Agency (JICA). Despite this growing pool of capital, the primary challenge has shifted from market creation to operational sustainability. Unfortunately, most local startups have yet to achieve profitability. To secure long-term investor confidence, both locally and globally, our ecosystem’s immediate focus must pivot toward building sustainable, cash-flow-positive business models rather than chasing raw growth.
Which sectors hold the greatest growth potential for Bangladesh over the next few years?
Two sectors stand out as high-potential frontiers for both domestic and foreign investment: renewable energy and advanced agro-based industries.
First, we are seeing a significant influx of capital into the clean energy landscape, particularly solar power. Driven by global energy volatility and the rising cost of imported fossil fuels, transitioning to renewable energy has become a macroeconomic necessity. This shift is not only attracting substantial international funding but is also poised to be a massive engine for job creation in grid modernization, engineering, and infrastructure development.
Second, the agro-processing industry represents a critical area of opportunity. Recent global conflicts and geopolitical tensions have triggered severe disruptions in both energy and food supply chains. As global food security concerns intensify, investing in high-yield, value-added agro-industries becomes vital. By expanding into commercial agro-processing, such as packaged goods, cold-chain logistics, and export-grade food items, Bangladesh can unlock massive economic returns.
The real transformation, however, will happen at the intersection of technology and cultivation. If the younger generation can successfully introduce modern agri-tech, such as precision farming through drones, automated irrigation, and robotics, we can dramatically scale up productivity. Prioritising fiscal incentives and policy support for these twin sectors should be a central focus of our national growth strategy.
