SIM Tax Removal Proposed in Budget

The government has proposed the complete withdrawal of the Tk 300 tax imposed on the purchase of new mobile SIM cards in the upcoming national budget for the 2026–27 fiscal year. The move is part of a broader fiscal adjustment strategy aimed at stimulating growth in the information and communication technology (ICT) sector, with an estimated revenue concession of approximately Tk 120 billion.

Despite the scale of the tax relief, sector analysts suggest that the benefits are unlikely to be directly transferred to end users. According to industry observers, the removal of the SIM tax is more likely to improve the profitability margins of mobile network operators, particularly multinational firms, rather than reduce retail costs for consumers in terms of call charges or mobile internet tariffs.

The budget, which is expected to be presented in parliament on Thursday afternoon by Finance Minister Amir Khosru Mahmud Chowdhury, has an overall projected size of Tk 9.38 trillion. Within this framework, significant policy emphasis has been placed on structural reforms in taxation, value-added tax, and licensing regimes across the ICT and telecommunications sectors.

Government sources indicate that the ICT sector has been prioritised as a “thrust sector” under the new fiscal plan. Currently, the overall tax burden in the telecom sector is estimated at nearly 50 per cent, while the ICT sector faces an average tax incidence of around 25 per cent. These levels are considered comparatively high when benchmarked against international standards, prompting policymakers to gradually rationalise the tax structure to enhance competitiveness and attract investment.

The SIM tax removal is positioned as an initial step in this broader reform agenda. However, it is expected to result in a direct reduction in government revenue of approximately Tk 120 billion in the next fiscal year. Officials argue that this short-term revenue sacrifice is intended to support long-term sectoral expansion and digital infrastructure development.

Market data further illustrates the maturity of the mobile telecommunications sector. Although the national population stands at around 180 million, the number of active mobile SIM subscriptions ranges between 320 million and 330 million, indicating a highly saturated market with multiple SIM ownership per user.

In contrast, fixed broadband penetration remains relatively low. Only around 8 to 9 per cent of households currently have access to fixed internet services. Stakeholders in the broadband industry argue that greater policy attention and fiscal incentives for this segment could have a more direct impact on digital inclusion and economic productivity.

Key Indicators

Overall, the proposed tax adjustment reflects a policy shift towards restructuring the digital economy framework, although debate continues regarding whether the benefits will be evenly distributed across consumers and operators.