The government is considering a reduction in the tax on new SIM card issuance and the total abolition of taxes on SIM replacements and Internet of Things (IoT) or Machine-to-Machine (M2M) SIMs.
This move is part of a broader effort to expand the telecommunications sector and strengthen digital connectivity throughout the country.
According to sources at National Board of Revenue (NBR), a proposal regarding these tax reforms is currently under consideration.
The Bangladesh Telecommunication Regulatory Commission (BTRC) initiated the process by sending a letter to the Posts and Telecommunications Division on 5 May, which was subsequently forwarded to the NBR.
The recommendations were originally discussed during a high-level meeting on 29 April , chaired by Rehan Asif Asad, the prime minister’s adviser on posts, telecommunications and ICT.
The session was attended by senior officials from Posts and Telecommunications Division, NBR, BTRC, and other relevant agencies.
The BTRC has identified the current tax structure on SIM issuance as a significant barrier to market expansion and subscriber acquisition. Data from the regulator shows that mobile operators currently spend approximately Tk700 to activate a new subscriber connection.
Of this amount, Tk300 is paid as SIM tax and Tk50 covers the cost of the SIM kit, while the remaining Tk350 is allocated to operations, distribution, marketing, and other taxes.
The commission noted that operators often subsidise nearly half of the acquisition cost, even as 43 per cent of the total expenditure goes to the government as non-recoverable SIM tax.
Given that the average revenue per user (ARPU) ranges between Tk130 and Tk150 per month, operators require between five and nine months to recover the cost of acquiring a single customer.
The regulator argued that the prevailing tax regime makes customer acquisition economically unattractive and creates a structural impediment to market growth.
It also cited international practices, pointing out that only a handful of nations, including Jamaica and Ghana, continue to impose taxes on new SIM issuance.
Regarding SIM replacements, BTRC contended that these do not generate new connections or additional revenue, as they merely reactivate existing numbers. Imposing taxes on these replacements amounts to double taxation and places an unnecessary financial burden on customers who lose their handsets or cards.
The BTRC has further recommended the complete withdrawal of taxes on IoT and M2M SIMs to accelerate digital transformation and facilitate the adoption of smart technologies.
The regulator highlighted that the overall tax burden on mobile services in Bangladesh stands at approximately 39 per cent, which is significantly higher than in many other countries.
The IoT and M2M SIMs generate substantially lower earnings – averaging only Tk20–25 per month – compared to the Tk130–150 earned from conventional subscribers.
The commission warned that maintaining the current tax burden could discourage investment and make large-scale deployment of IoT services economically unviable.
Removing these taxes could significantly expand the use of smart devices across various sectors, including industrial automation, logistics, agriculture, energy management, and smart city solutions. The BTRC believes this would enhance productivity, reduce waste, and create new business opportunities.
Additionally, wider adoption of IoT services is expected to drive higher data consumption, eventually generating additional government revenue through VAT and service-related taxes.
