The National Board of Revenue (NBR) has raised taxes and duties on mobile phone usage and broadband internet services, doubling the Value Added Tax (VAT) on broadband to 10%.
On Thursday night, January 9, two ordinances were issued: the Value Added Tax and Supplementary Duty (Amendment) Ordinance 2025 and the Excise and Salt (Amendment) Ordinance 2025. Following the issuance, the NBR’s VAT division released guidelines, immediately enforcing the changes.
The increase in supplementary duty on essential mobile phone services will make calls and internet usage costlier. Previously, supplementary duty on mobile SIM cards or recharge cards was 20%, which has now been raised to 23%. This means users will now pay over BDT 56 in taxes for every BDT 100 recharge.
Broadband internet services are also hit hard, with the imposition of a 10% supplementary duty alongside the existing VAT. Additionally, the VAT rate for local businesses has increased from 5% to 7.5%, leading to an estimated cost increase of up to 10% for service providers.
Business operators believe these tax increases will inevitably burden consumers. One industry representative commented, “Under the current one-country-one-rate policy, internet providers face losses on BDT 500 packages. Acquiring a new customer costs approximately BDT 4,000, and these new taxes, combined with operational expenses and the SOF fund requirements, make it increasingly challenging to maintain service quality.”
The ICT sector is not alone in bearing the brunt of increased taxes. The electronics sector also faces challenges, as corporate taxes on locally produced refrigerators, air conditioners, and motorcycles have doubled. Furthermore, VAT and duties on over 100 items, including tissue paper and baby food, have been raised.
These measures come as part of Bangladesh’s effort to comply with the International Monetary Fund’s (IMF) conditions for a $4.7 billion loan, adding further pressure on both businesses and consumers.
