Budget for FY26: OTT platforms may get costlier

The interim government is likely to impose a 10 percent supplementary duty on over-the-top (OTT) platform services in the upcoming budget for the fiscal year 2025-26 — a move that is expected to raise consumer costs and increase spending on paid streaming services.

Swizee Islam, content head of Binge, told The Daily Star that the platform currently pays 2 percent advance income tax and 15 percent VAT.

"If an additional 10 percent supplementary duty is imposed in the upcoming budget, the overall cost of the product will rise significantly," she said.

"This will inevitably push up the price for consumers as well, making it increasingly difficult for us to sustain operations in this industry," she added.

Redoan Rony, chief executive officer of Chorki, said the government has not yet finalised the OTT policy.

During the previous government, when the drafting of this policy was underway, adequate discussions were not held with stakeholders, he said.

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"This is a growing industry in Bangladesh, and the government must first make a plan to protect it," he said.

"If taxes are imposed in this manner before the industry has even found its footing, it will have a negative impact," Rony said.

To inspire and support the OTT industry, the government should prioritise finalising the OTT policy, he added.

Apart from slapping a supplementary duty on OTT platforms, the government is also expected to hike the value-added tax (VAT) on commissions from online sales of goods to 15 percent in the fiscal year 2025-26, up from 5 percent a year ago.

Already, the standard 15 percent VAT is applied on most types of commissions.

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But the VAT rate on sales commissions is lower in the case of online sales, said an official of the finance ministry.

"This is a distortion in VAT. So, we are addressing this," he said, but added that the cost of shopping online would increase only marginally.

OTT platforms in Bangladesh have seen rapid growth in recent years, driven by increased smartphone penetration, affordable internet, and rising demand for localised content.

The Covid-19 pandemic significantly accelerated the shift from traditional TV and cinema to digital streaming platforms, industry people said.

Popular OTT platforms in Bangladesh include Chorki, Hoichoi, Bongo, Binge, etc.