Software exporters demand 20pc cash incentive
The government should offer 20 percent cash incentive on the export of software and IT-enabled services, leaders of ICT trade bodies said at a pre-budget discussion yesterday.
They also demanded withdrawal of the 15 percent value-added tax on internet use in the next budget.
On behalf of the stakeholders, Sami Ahmed, component team leader of the government's Leveraging ICT project under the ICT division, placed the demands at a meeting organised by Bangladesh Computer Council.
State Minister for Planning and Finance MA Mannan said they will take these demands into consideration before finalising the budget for fiscal 2017-18.
Mustafa Jabbar, president of Bangladesh Association of Software and Information Services, said there are several export-oriented industries that are currently enjoying cash incentives.
In its seventh five-year plan, the government gave the ICT industry a target to earn $1 billion by 2018 and $5 billion by 2021. In 2014, the industry earned $445 million and so far this year, the amount crossed $700 million.
Leaders of Bangladesh Association of Call Centre and Outsourcing (BACCO), which is mostly engaged with export of IT-enabled services, said internet is their lifeline and withdrawal of VAT would give the sector a boost.
“We want withdrawal of VAT on individuals' internet use as well. But if that is not possible, we want VAT withdrawal from the use of internet in business,” said Towhid Hossain, general secretary of BACCO.
The ICT industry placed the demand to withdraw VAT from all internet use last year as well, but the government did not grant it in the current budget.
MA Hakim, president of Internet Service Providers Association of Bangladesh, said they also want withdrawal of the 15 percent VAT on network services.
“There is a huge tax on networking equipment as well, and that is why we cannot ensure quality services for the end-users.”
Currently there is 37.83 percent VAT on the import of optical fibre equipment; they also demanded withdrawal of this.
Kazi Zashimul Isalm, president of Indigo.bd, a local company that assembles mobile handsets, said there is a 21 percent tax on handset imports. However, for assembly, it is about 75 percent, he added.
Rajib Ahmed, president of the e-commerce platform, demanded withdrawal of VAT from online transactions. There are about 1,000 e-commerce entrepreneurs and it is tough for most of them to pay the VAT on their transactions, added Ahmed.
The VAT on online transactions was imposed in the last budget. The government should reduce the tax on ICT services and consider it a long-term investment, said ICT State Minister Zunaid Ahmed Palak.
In response, the state minister for finance said they will consider these demands for the sake of a 'Digital Bangladesh'. Members of the National Board of Revenue Pervez Iqbal and Jahangir Hossain were also present.