Gov’t Identifies ICT & Telecom as Key 'Thrust Sector', Outlines 5 Priority Pillars

• Five Structural Priorities: The government is focusing on lowering telecom taxes, improving connectivity, building X-Road-styled Digital Public Infrastructure, expanding AI/cybersecurity training, and incentivizing local electronics manufacturing.
• Telecom Tax & Capacity Overhaul: Proposals are underway to establish a predictable 5-year tax structure and remove SIM taxes, alongside urgent capacity upgrades to bridge the gap between 6 TB supply and 12 TB peak submarine cable demand.
• Policy & Ecosystem Reforms: Official work on a National AI Policy begins in Q4 2026, alongside key business demands from AmCham regarding Digital Permanent Establishment clarity, ISP turnover tax rollbacks, and streamlined international transactions.

DHAKA, Aug 9 (Sun): Considering the information technology and telecommunications sector as one of the primary drivers of economic growth or a "thrust sector," the government is giving special priority to five key areas.

The priorities are: reducing the tax burden in the telecom sector, ensuring improved mobile and broadband connectivity, building digital public infrastructure, creating a skilled workforce in artificial intelligence (AI) and cybersecurity, and strengthening the domestic electronics manufacturing industry.

Speaking as the chief guest at a policy dialogue titled "Accelerating Bangladesh’s Digital Future: Policy Priorities for Innovation, Investment, and ICT-Led Growth," organized by the American Chamber of Commerce in Bangladesh (AmCham) at The Westin Dhaka on Sunday (August 9), Rehan Asif Asad, Adviser to the Prime Minister on Telecommunications, ICT, Science, and Technology, outlined these policy decisions and priorities of the government in detail.

Indicating tax cuts and predictable policy formulation in the telecommunications sector, the Adviser stated that while the effective tax rate in the telecom sector worldwide averages between 22 and 27 percent, in Bangladesh this rate stands at an abnormally high level of 51 to 56 percent. To remove this disparity, alongside formulating a predictable and stable tax structure for five years, the withdrawal of the SIM tax is under policy consideration.

Emphasizing the quality enhancement of mobile and broadband connectivity, he further added that although Bangladesh ranks seventh in the world in terms of the number of subscribers, the country still lags behind in terms of service quality. Quoting research from the United Nations and the International Telecommunication Union (ITU), he shared that if broadband penetration can be increased by 10 percent, national GDP growth rises by up to 1 percent. Therefore, improving the quality of connectivity is essential in the interest of growth.

Rehan also underscored the necessity of boosting submarine cable capacity, noting that Bangladesh’s current capacity is six terabytes, whereas the peak national demand has reached 12 terabytes. He further informed that traffic volume doubles every two years, while laying a new submarine cable takes two to three years.

Regarding the establishment of Digital Public Infrastructure (DPI), the Adviser stated that modeled after Estonia’s world-famous ‘X-Road’ framework, a completely free-to-use platform titled ‘One Citizen, One ID, One Digital Wallet’ is being developed in Bangladesh. Through this, every citizen's national ID will be directly integrated with the banking network and the National Board of Revenue (NBR) system.

Highlighting government steps to build a skilled workforce centered on AI, cybersecurity, and data, Rehan Asif Asad said that 23,000 to 30,000 engineering and science graduates pass out in the country every year. The Adviser stressed imparting advanced training to them in artificial intelligence (AI), cybersecurity, and data science. Additionally, there are plans to incorporate these subjects into the primary and secondary school curricula.

Identifying national cybersecurity as his immediate priority, he stated that work on a national AI policy will commence in the fourth quarter, where a joint team comprising representatives from the private sector, government, academia, and research institutions will be formed.

Furthermore, Rehan Asif Asad remarked that special government incentives are required for the electronics manufacturing industry, similar to the readymade garments (RMG) sector. Citing the example of Vietnam in this context, he noted that with proper policy support, the country’s consumer electronics exports surged from $1 billion to $217 billion over the past decade.

National AI Policy and Cybersecurity: Terming cybersecurity as an immediate priority, the Adviser informed that in the fourth quarter (Q4) of 2026, the official work on formulating a ‘National AI Policy’ will begin through a joint team composed of the private sector, government, academics, and researchers.

Submarine cable capacity and data sovereignty received significant prominence in the Adviser's address. He mentioned that against the country’s 6 terabytes of submarine cable capacity, peak demand has hit 12 terabytes. Data traffic is doubling every two years, and deploying a new cable takes 2–3 years. Hence, he urged immediate capacity expansion to safeguard digital sovereignty.

Highlighting the government’s plans regarding information technology in a presentation, the Prime Minister’s Adviser shared that an RFID-based automated toll collection system is currently running in test mode. Furthermore, Bangladesh Bank has agreed in principle to allow international fund flows through ‘Bangla QR,’ and the ‘One Citizen, One ID’ platform will remain open to both domestic and international networks.

Delivering the keynote address at the policy dialogue, AmCham President and Vice President of Mastercard, Syed Mohammad Kamal, welcomed the government's approval of the 'Personal Data Protection Act (PDPA)' as well as granting tax exemptions to freelancers and content creators, alongside duty concessions on semiconductor imports.

However, to foster a business-friendly environment, AmCham raised several primary demands:

• Digital Permanent Establishment: Demanded further clarity regarding the threshold of 100,000 users set under the new tax regulations.
• ISP Turnover Tax: Urged a reconsideration of the decision to raise the turnover tax on Internet Service Providers (ISPs) from 1% to 1.5%.
• International Transactions: Demanded the simplification of foreign currency transaction processes for tech companies and startups.

The dialogue, moderated by Rubaba Dowla, Chair of AmCham’s ICT Sub-Committee and Country Managing Director of Oracle, was attended by representatives from Citibank, Cisco, HSBC, Mastercard, MetLife, Pathao, PwC, Standard Chartered Bank, ShopUp, and Visa. Demands raised during the dialogue also included open-loop ticketing in metro and toll systems, a 15% VAT exemption in startup sandboxes, and the prompt setup of a National Data Governance Authority.

//DBTech/IH/SME//