ICT sector gets a boost
The Jatiya Sangsad yesterday passed tax measures for the next fiscal year with some changes in VAT and tariff rates, aiming to boost the ICT sector and promote local industries.
Value Added Tax (VAT) on internet usage has been reduced to 5 percent from 15 percent, a move that is likely to make internet use cheaper.
The reduction came in the face of stakeholders' continued demand for withdrawing VAT on internet usage to speed up the process of digitisation. Now, there are 8.69 crore active internet connections in the country.
The government also backtracked on its move to slap 5 percent VAT on computers and accessories at the trading stage amid concerns that it would lead to a rise in their prices.
There is good news for mobile phone assemblers as VAT on assembling has been slashed to 5 percent from 15 percent.
“We are taking various steps to expand the ICT [information and communication technology] sector,” Finance Minister AMA Muhith said in his closing speech on the national budget for fiscal 2018-19 after placing proposals in parliament.
He said the proposals were made after examining the opinions and recommendations from lawmakers, businesses and other stakeholders.
The House later approved the tax measures.
However, no change was made in the tax measures proposed by Muhith for individuals and companies despite demands from various quarters to raise the income tax-free limit to ease pressure on low income people.
The existing tax-free income limit of Tk 250,000, which has been unchanged for the last three years, will remain for the next fiscal year as well.
The JS also gave the go ahead to the proposed tax cuts for banks and financial institutions despite criticism from various sections against the reduction for the sector that suffers from large amounts of defaulted loans and lack of corporate governance.
The House slapped higher tax on both low and premium categories of cigarettes.
The minimum price of cigarettes in the low category has been increased to Tk 35 from the proposed Tk 32 per 10-stick pack.
The price of a 10-stick pack in the premium category has been raised to Tk 105 from Tk 102.
The JS, based on Muhith's proposal, also waived supplementary duty on petroleum jelly used mostly by poor and low income people during winter.
The government also cancelled its move to slap 10 percent supplementary duty on filament bulbs so that poor people can use those at affordable costs.
To facilitate growth of the motorcycle industry, the House gave the nod to Muhith's proposal for slashing VAT on locally assembled motorcycles to 7 percent from 15 percent.
Responding to the pleas from dairy farmers, the government also retreated from its plan to reduce import tariff on milk powder.
It also waived customs duty on import of some raw materials used for producing Hepatitis-C medicine.
Import duty on unprinted PVC (polyvinyl chloride) sheets has been reduced to facilitate domestic manufacture of SIM (subscriber identification module) and smart cards.
Duty protection has also been given to manufacturers of cold-rolled and colour-coated sheets, and motors with capacity of up to 750 watt.