Taxes, Talent, and Technology: ICT Sector Sets Reform Roadmap

Today, Tuesday, February 17, marks the beginning of a new chapter in Bangladesh’s history. Breaking with longstanding tradition, the swearing-in ceremony of the newly elected Members of Parliament of the 13th National Parliament and the new cabinet is being held outside Bangabhaban, at the South Plaza of the National Parliament Building. Although there is speculation over who will assume responsibility for the Ministry of Information and Communication Technology (ICT) in the new cabinet formed under the leadership of BNP Chairperson Tarique Rahman, the party’s manifesto has accorded the sector the highest priority.

Against this backdrop, Tanvir Ibrahim, one of the leading entrepreneurs in Bangladesh’s Business Process Outsourcing (BPO) sector and President of the Bangladesh Association of Contact Center and Outsourcing (BACCO), shared his views with Digibangla on the challenges and expectations facing the science, technology, and telecom sectors under the new government.

Tariff Barriers and Talent Shortage

In the discussion, Tanvir Ibrahim identified “tariff barriers and a shortage of skilled manpower” as major challenges for the incoming government. He believes that the high tax structure imposed on telecom and ICT hardware has become a significant obstacle.

“High VAT and taxes on telecom services, along with steep import duties on hardware, are slowing down the country’s digital advancement,” he said.

He also highlighted the acute shortage of skilled professionals in frontier technologies such as Artificial Intelligence (AI), cybersecurity, and data science as a pressing concern. According to him, due to inadequate branding, Bangladesh continues to be perceived in the global market as a source of “low-cost labor,” which results in large-scale global projects being diverted to countries like India or Vietnam.

Digital Divide and 5G Expansion

Responding to a question, the BACCO President expressed concern over the significant disparity in internet speed and pricing between urban and rural areas — the digital divide. He noted that the slow rollout of 5G technology and the absence of a stable, investment-friendly tax structure are eroding entrepreneurs’ confidence.

Unless bureaucratic delays and complex regulatory frameworks are addressed, he warned, it will be difficult for Bangladesh to remain competitive in the global marketplace.

Policy Proposals for Reform

Tanvir Ibrahim, who also serves as Country Director of Automation Solutionz Bangladesh, put forward a set of concrete recommendations to address these challenges.

“The extension of IT sector tax exemptions until 2031 is now a necessity,” he stated.

He further recommended special tax deductions for investments in Research and Development (R&D) within the IT sector, as well as additional incentives for AI-based exports. Emphasizing stronger collaboration between industry and academia, he called for the inclusion of cloud computing and AI technologies in academic curricula.

To restore investor confidence, he urged the government to eliminate bureaucratic complexities in the profit repatriation process. According to him, establishing an investment-friendly and stable policy framework is essential for the sustained growth of the IT-enabled Services (ITES) sector and for encouraging long-term foreign investment in Bangladesh.

Eight Priority Recommendations for Immediate Action

Following the new cabinet’s swearing-in, Tanvir Ibrahim has presented eight priority proposals to bring transformative changes to the ICT sector.

He emphasized the immediate formation of a National ICT Reform Commission to undertake rapid reforms of existing policies and licensing processes in consultation with ICT associations. He also underscored the importance of prioritizing local IT companies in e-governance and Digital Public Infrastructure projects under Public-Private Partnership (PPP) models.

Among his other key recommendations are:

• Enacting and enforcing a neutral, internationally compliant Data Protection Law

• Reducing wholesale internet prices to ensure high-speed broadband reaches grassroots levels

• Introducing PayPal or equivalent global payment gateways to facilitate seamless remittance flows for freelancers and entrepreneurs

• Establishing a strong and independent cybersecurity framework

• Implementing centralized NID verification for all digital citizen services

• Launching a dedicated country branding initiative to position Bangladesh as a strong “tech hub” in international media and global technology events

According to him, decisive and coordinated reforms in taxation, infrastructure, branding, and governance will be crucial for unlocking the full potential of Bangladesh’s ICT and BPO sectors in the coming years.

DBTech/SR/MUM/OR