Withdraw all taxes on e-commerce: FBCCI | The Daily Star
12:00 AM, June 16, 2016 / LAST MODIFIED: 04:59 AM, June 16, 2016

Withdraw all taxes on e-commerce: FBCCI

The government should provide financial and policy supports to IT business and e-commerce as the sector has the potential to register robust growth, FBCCI President Abdul Matlub Ahmad said yesterday.

“Currently, Bangladesh is the second largest apparel exporter in the world. The garment sector could reach this stage because of the government's long-term policy support and financial incentives,” he said.

Similarly, the IT and e-commerce sector has the potential to be one of the major sectors for export, employment and economic development.

Ahmad's comments came at a discussion on the proposed budget and the roles of IT sector in the development of Bangladesh, at the Federation of Bangladesh Chambers of Commerce and Industry in Dhaka.

At the discussion, IT and e-commerce entrepreneurs urged the government to waive all kinds of taxes and VAT until 2024 for the sake of the sector's growth.

“This is a nascent sector with the potential to be a giant,” said Razib Ahmed, president of the e-Commerce Association of Bangladesh or e-CAB.

The government should also give a cluster allocation of Tk 100 crore so that the entrepreneurs can get easy loans for starting or running their businesses.

The global e-commerce market size is $500 billion and in such a big market, Bangladesh is only a starter, he said. “So, the government should nurture the sector.”

Bangladesh's e-commerce sector might face serious challenges for the possible arrival of global giants Amazon and Alibaba in 2017.

“We don't know what would be the situation of e-commerce in our country once such giants come to Bangladesh for online trade,” he added.

Shameem Ahsan, president of the Bangladesh Software and Information Services Association, also said the entrepreneurs in e-commerce are worried as the government has withdrawn all financial incentives for them in the proposed budget.

Almost all the sectors are now linked to e-commerce, he said.

“So it is our view that the country's businesses would be hampered if the growth of e-commerce is held back.”

He called for exemption of all kinds of taxes and VAT from e-commerce.

TIM Nurul Kabir, secretary general of the Association of Mobile Telecom Operators of Bangladesh, said the total investment in the country's mobile sector is more than Tk 80,000 crore.

“This sector's contribution to the society and economy is immense, but it is burdened with taxes and VAT.” 

Bangladeshi mobile companies are the second highest taxpayers globally, he said.

“If any company earns Tk 100, it has to pay Tk 55 as corporate tax. Our demand is that the government withdraws 15 percent VAT on the usage of internet,” he added.

M Shoeb Chowdhury, a director of the FBCCI, said previously the government used to incorporate 75 percent of the proposals of the businessmen in the budget.

But this time, less than 25 percent of the proposals were incorporated, he said, adding that the proposed budget lacks subsidies for different sectors.

Shafiul Islam, vice-president of the FBCCI, said many things were not considered in the budget this year.

If the budgetary proposals fail to attract more investment, the expected development would not take place, he said.

Citing an example, he said Bangladesh was once very weak in backward linkage industries of garment sector.

But now, the primary textile sector can supply 95 percent of the raw materials for knitwear and more than 40 percent for the woven sector.

Similarly, the IT and e-commerce sectors would also grow big if the government patrons the entrepreneurs, he added. 

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