DHAKA, May 22, 2026 (BSS) - Bangladesh could witness faster economic growth and generate nearly $2 billion in additional annual revenue by 2034 through reforms in the mobile connectivity sector, according to a newly released study.

The study highlights that proposed tax reforms in the mobile sector could raise the annual real growth rate of GDP per capita from 6.6 percent to 7.2 percent by expanding digital connectivity, increasing mobile penetration and boosting data usage across the country.

The report, titled “Bangladesh Can Increase Economic Growth by Lowering Barriers to Digital Connectivity”, was prepared in May 2026 by Frontier Economics Limited, a Europe-based research and consulting firm.

Researchers observed that digitalisation has become a major driver of financial inclusion, education, healthcare and e-commerce in Bangladesh, while improved connectivity could further strengthen the country’s long-term tax base and economic productivity.

They noted that reforms aimed at reducing the tax burden on the mobile sector could accelerate digital adoption, boost GDP growth and widen the national tax base over time.

According to the findings, implementation of mobile sector tax reforms could raise the annual real growth rate of GDP per capita from 6.6 percent to 7.2 percent.

The reforms are also expected to stimulate consumer demand, resulting in a 5 percent increase in mobile penetration and a 4 percent rise in average data usage per subscriber.

The report observed that digitalisation helps formalise economic activities and improves tax collection efficiency, potentially increasing total tax revenue by up to three percentage points of GDP in the long run.

At present, Bangladesh’s mobile sector carries tax burdens in the region, with taxes and fees accounting for nearly 55 percent of sector revenues. The current tax structure includes 15 percent VAT, 20 percent Supplementary Duty, a 1 percent surcharge, revenue sharing obligations and Social Obligation Fund contributions.

The study noted that the existing SIM tax of Tk 300 remains a major barrier for new users, while corporate tax rates for mobile operators, ranging between 40 percent and 45 percent, are considerably higher than those applied to most other sectors.

Under the proposed reform framework, the combined sales and turnover tax rate would be reduced to 23 percent through cuts in Supplementary Duty and revenue sharing charges, alongside the elimination of turnover taxes and the Social Obligation Fund.

The proposal also recommends removing SIM taxes entirely and lowering corporate tax rates for mobile operators to 30 percent.

Although the reforms may initially reduce government revenues from the mobile sector, the report described this as a temporary transition period. It estimated that revenue could decline by around US$ 761 million in 2027, equivalent to roughly 2.5 percent of total government tax proceeds.

However, the report projected that stronger economic activity generated by improved connectivity would gradually offset the shortfall. Fiscal break-even is expected to be achieved by 2030, when the reforms would begin generating positive returns for the government.

By 2034, the yearly net fiscal impact is projected to reach nearly US$ 2 billion in additional revenue compared to the existing trajectory.

The report recommended that the government rebalance sector-specific taxes to improve affordability, remove SIM-related barriers to digital access and integrate the reforms into the broader Smart Bangladesh Vision 2041 agenda.

It also stressed the importance of preparing a fiscal transition plan to manage temporary revenue losses during the initial implementation years before the wider economic benefits fully materialise.