The Association of Mobile Telecom Operators of Bangladesh (AMTOB) today urged the government to remove VAT on SIM and e-SIM to foster growth in the telecom sector. 

In its budget proposals to the National Board of Revenue (NBR), AMTOB said eliminating VAT on SIM access packages, particularly in rural areas, would make them more affordable and financially viable for mobile operators. This, in turn, would support Bangladesh's digital transformation and boost the industry's development. 

The proposal comes at a time when mobile internet subscriptions declined by 1.31 crore in the seven months to January, dropping to 11.60 crore. 

Industry insiders attribute the decline to a 50 percent hike in SIM tax, reduced subsidised SIM sales by operators, and economic challenges faced by consumers.

Following the tax increase, smaller operators such as Banglalink and Robi significantly cut subsidies, making it harder to attract new users. 

At the start of the fiscal year, the government raised the SIM tax by 50 percent to Tk 300. AMTOB also called for Supplementary Duty (SD) and Surcharge (SC) removal on telecom services. 

The association argued that SD and SC are typically levied on luxury and non-essential goods such as alcohol and tobacco, whereas telecom services are essential.

It also noted that internet services provided by non-telecom Internet Service Providers (ISPs) are exempt from SD and SC, creating a pricing disparity that disproportionately affects low-income users and hinders progress towards a "Digital Bangladesh." 

During a meeting with NBR, AMTOB submitted 23 proposals covering Income Tax, VAT, Import Duty, and Supplementary Duty for the telecom sector. 

"Despite being an essential service, the telecom industry in Bangladesh faces sector-specific taxation, making it one of the most heavily taxed globally. The government has increased taxes almost every year, negatively impacting consumers," said AMTOB Secretary General Lt Col Mohammad Zulfikar (Retd). 

AMTOB also called for a revision of corporate tax rates for mobile operators, arguing that they should not be taxed separately but aligned with general corporate tax rates.