Bangladesh’s mobile phone manufacturing industry, once hailed as a potential pillar of the country’s digital ambitions, is bracing for a fresh blow after the interim government proposed a hike in value-added tax (VAT) at the production stage in the national budget for fiscal year 2025-26.

The government is likely to hike value-added tax (VAT) on broadband internet and impose a 5 per cent VAT on handsets manufacturing in the upcoming budget, which will increase handset and internet prices from next fiscal year.