Tax exemption for ICT industry should be prolonged until 2030

The budget for the fiscal year 2023-24 announced by the government did not reflect the proposals of the information and communication technology sector as expected. Rather, it is inconsistent with the purpose of Smart Bangladesh. 

The business leaders of the national trade organizations of the ICT sector said this at a press conference in a budget reaction on Sunday, June 4, 2023 at BASIS Auditorium in Dhaka.    

Bangladesh Association of Software and Information Services (BASIS), Bangladesh Computer Samity (BCS), Bangladesh Association of Contact Center & Outsourcing (BACCO), Internet Service Provider Association of Bangladesh (ISPAB) and E-Commerce Association of Bangladesh (E-CAB) jointly organized the press conference. 

BASIS President Russell T. Ahmed, BACCO President Wahid Sharif, ISPAB President Md Imdadul Hoque and E-CAB Vice President Mohammad Shahabuddin were present at the press conference and gave their budget reaction on behalf of their respective associations and answered various budget related questions from the media representatives. 

In his speech, BASIS President Russell T. Ahmed said, “The government has announced a budget of about tk7.62 lakh crore which is undoubtedly the biggest budget ever. As every time, the budget allocation for the ICT sector has increased in this year's budget. But in reality there is no positive or significant good news for the ICT industry especially for the businessmen.” 

“After making specific and logical proposals, extending the period of corporate tax exemption for this sector till 2030, withdrawing VAT on software and ITES, increasing cash incentive from 10% to 20% against software and IT services exports. I proposed to give special incentives to software buyers but none of these were taken into account. Smart Bangladesh goal. Smart Bangladesh means that every sector will be smart. Where education sector, health sector, agriculture sector, energy sector, all sectors will be smart”, he added.

BCS representative said, “We are completely disappointed. The current total tariff is 26% as a result of imposition of 15% duty on imports of laptops, FMC printers and toner cartridges in the last fiscal year 2022-23, which were proposed to be withdrawn this year, but remain the same. Not a bit has changed. ”

BACCO President Wahid Sharif said, international buyers get BPO services from Bangladesh at a relatively low price, so Bangladesh is currently in an important position in the international ICT industry market, many contact center software is not yet being developed in the country which has to be imported from outside the country, but the operating system, database, security software and other software is subject to import duty of 25 per cent along with 15 per cent VAT. 

As a result, we believe that the cost of services in this industry will increase and will have a negative impact on the international market.

ISPAB President Md. Imdadul Hoque said, “ISPAB has been working for 25 years with the aim of building digital Bangladesh. Inspite of the directives of the Prime Minister in the proposed budget for the FY2023-24, not including all services of ISPs in ITES, not reducing the duty on the materials used in the IT sector and not withdrawing 10 percent advance tax on broadband internet service providers, expansion of internet services, ISPAB that building Smart Bangladesh from digital Bangladesh will be hampered.