The government is planning to bring Bangladesh’s rapidly growing online gaming sector under the tax net as part of efforts to meet an ambitious revenue target of Tk604,000 crore in the upcoming fiscal year.
Officials at the National Board of Revenue (NBR) said the move aims to formalise the digital economy, monitor online transactions, and prevent money outflow through unregulated foreign platforms.
According to market research firm Statista, Bangladesh’s online gaming market has already exceeded Tk2,000 crore in size. However, a significant portion of transactions in the sector remains outside the formal tax system.
Revenue officials said the government is considering imposing value-added tax (VAT) and supplementary duties on in-app purchases, subscription fees, virtual gaming currencies, and digital advertisements linked to online gaming platforms.
Currently, a large number of Bangladeshi users spend money on international gaming platforms to buy skins, characters, virtual coins, and premium gaming features. Most of these transactions remain untaxed.
NBR officials believe that bringing such transactions into formal channels would not only increase revenue collection but also strengthen oversight of cross-border digital payments.
According to their estimates, imposing at least 15 per cent VAT on such transactions could generate between Tk200 crore and Tk250 crore in annual revenue.
With Bangladesh continuing to record one of the lowest tax-to-GDP ratios in South Asia, international development partners have been pressuring the government to expand revenue collection.
Against this backdrop, policymakers are increasingly viewing the digital economy as a potential new source of tax revenue.
NBR officials said discussions are also underway to introduce an automated VAT deduction system on payments made through mobile financial services, bank cards, and app stores.
At the same time, the government is considering bringing gaming platforms under a registration framework if they want to operate in Bangladesh.
According to NBR officials, a presentation on the matter has already been made to Finance Minister Amir Khasru Mahmud Chowdhury, who has expressed support for the proposal.
Several countries around the world have already imposed taxes on online gaming and digital services. India introduced a 28 per cent GST on online gaming, boosting government revenue, although it also increased operating costs for gaming companies.
Pakistan has implemented digital service taxes and VAT, while Indonesia imposed a 10 per cent VAT on digital products and required foreign digital platforms to register with authorities.
Economists, however, warned that implementing such measures without a clear legal framework could prove difficult.
Former lead economist of the World Bank Dhaka office Zahid Hussain told TIMES that the government must first clearly define which games are skill-based and which fall under gambling or betting activities.
“If the legal definitions remain unclear, tax implementation could become controversial,” he said.
He also noted that Bangladesh’s digital data monitoring system is still not sufficiently strong, making it difficult to effectively collect taxes from foreign-based gaming companies such as Tencent or Activision Blizzard.
According to him, imposing excessive taxes could also push some users toward illegal or unauthorised betting platforms that remain outside government oversight.
Policy analysts said taxation alone would not be enough, and that the sector also requires a balanced regulatory framework.
They stressed the need for mandatory registration of gaming platforms, automated VAT collection through payment gateways, and separate legal frameworks distinguishing gaming from gambling.
M Masrur Reaz, chairman and chief executive officer of Policy Exchange Bangladesh, said the country could potentially generate several hundred crore taka in annual revenue from the online gaming sector if appropriate policies and technological capabilities are developed.
However, he added that implementing such measures without adequate infrastructure and legal preparedness could become a major challenge for the government.
