Five ICT trade bodies demand tax exemption until 2031

Five associations representing the ICT sector yesterday demanded that the government extend tax exemptions on businesses offering software and IT-enabled service (ITES) till 2031, saying their development was crucial to the government's vision for a Smart Bangladesh.

The organisations are the Bangladesh Association of Software and Information Services (BASIS), Bangladesh Computer Samity (BCS), the Bangladesh Association of Contact Centre & Outsourcing (BACCO), the Internet Service Provider Association of Bangladesh (ISPAB), and the e-Commerce Association of Bangladesh (e-CAB).

"If the IT sector is taxed, it will not even yield one percent of total tax revenue. The IT sector is just starting to take off. At this time, it is not right to threaten a sector with such potential, especially for this small income," BASIS President Russell T Ahmed said.

"As the government wants to transform the country into a Smart Bangladesh, extending tax exemptions is more important than ever for this sector. We are demanding a tax exemption on the IT sector till at least 2031. BASIS has spoken to senior government officials and formally sent letters in this regard."

He hoped the government would give due consideration to the demand for a tax exemption, especially as it would facilitate the expansion of the local IT sector and enhance foreign currency earnings from the sector.

"A tax exemption for this sector would benefit not just thousands of companies in the IT sector but serve the development of the entire country and the implementation of the Smart Bangladesh vision," Ahmed said.

BCS President Subrata Sarkar said: "Foreign investors invest in Bangladesh's local IT sector with a long-term view since the industry has only just started to take off. So, I think there is no option but to continue this tax exemption."

ISPAB President Md Imdadul Hoque said it was very important to maintain the tax exemption until 2031 for the desired development of the sector. He also reiterated the demand to include the ISPAB industry in the ITES sector.

BACCO President Wahid Sharif said the current prosperity of the sector was due to the provision of tax exemptions.

"Evidently, the government holds the view that they are not currently receiving revenue from this industry. However, with substantial generation of employment opportunities and the burgeoning purchasing power of working professionals, the government is getting significant contributions through personal income tax and value-added tax payments," he added.

e-CAB Senior Vice-President Mohammad Shahabuddin said: "The sector needs special care and facilities for some more time due to changes in technology and other related conditions."

Fahim Mashroor, former president at BASIS, said IT entrepreneurs have always faced hurdles in getting finance for setting up or expanding their businesses as banks are reluctant to invest.

"Most IT companies grow on the back of self-funding. The imposition of corporate tax would be a crushing blow to their business," he said.

At present, the government offers tax breaks to entrepreneurs in the software and ITES sector.

But the privilege is going to expire on June 30 this year.