The key ICT sector business associations expressed mixed reaction over the proposed national budget for the fiscal year (FY) 2024-25, calling for revising some of the provisions in it.
Bangladesh Association of Software and Information Services (BASIS) urged the government to provide policy support and maintain the tax-free status of the ICT sector to make Bangladesh self-sufficient in information technology by the year 2041.
BASIS emphasised that the tax exemption will significantly boost the IT sector, serving as the nucleus in building a Smart Bangladesh including various sectors like education, healthcare, agriculture, banking, and manufacturing, which are integral to the Fourth Industrial Revolution.
BASIS believes this initiative is pivotal for achieving self-sufficiency in software and IT services.
The national trade body for software and IT service outlined the future goal of achieving self-sufficiency in information technology.
They stressed the importance of prioritising the domestic IT sector in government procurement, suggesting that foreign institutions should partner with local companies when participating in government tenders.
As Bangladesh transitions to a developing country in 2026, establishing a recognised system of intellectual property valuation will be crucial, said BASIS adding that this will help attract foreign investment and enable entrepreneurs to secure loans and investments from domestic banks.
BASIS called for the inclusion of cloud services, system integration, medical transcription, SEO services, website hosting, IT outsourcing, and the Nationwide Telecommunication Transmission Network (NTTN) under the tax exemption.
The association urged the government to maintain current duty-free facilities for investors in economic zones and hi-tech parks, who face a potential 1 per cent import duty on capital equipment.
They believe that collaborating with the private sector to maintain these benefits will significantly increase foreign investment in hi-tech parks over the next few years.
The key ICT association underlined the importance of prioritising mobile phones, smartphones, and smart devices for Smart Bangladesh, calling for the withdrawal of newly imposed tariff proposal to ensure technology benefits reach everyone, including marginalised communities.
The Internet Service Providers Association of Bangladesh (ISPAB) has expressed strong disappointment over the proposed budget, highlighting the lack of attention given to their sector despite their vital role in the nation's digital infrastructure.
ISPAB had put forward four proposals aimed at transforming Digital Bangladesh into Smart Bangladesh. However, none of these proposals were reflected in the budget announced by Finance Minister Abul Hassan Mahmood Ali.
This has left the ISP industry, which has been pivotal in maintaining digital connectivity for decades, feeling not only disappointed but also shocked.
Emdadul Haque, president of ISPAB, voiced his concern, stating that the absence of their services from the long-desired ITES (Information Technology Enabled Services) category in the budget was deeply regrettable.
He emphasised that this omission undermines the Prime Minister's initiative and the decisions made by the Smart Bangladesh Taskforce's executive committee.
Haque further pointed out that despite the Prime Minister's instructions, the budget failed to include all ISP services under ITES, reduce duties on IT sector materials, and withdraw the 10 per cent advance tax on broadband internet services.
These measures, according to ISPAB, are crucial for the expansion of internet services and the continued development of Digital Bangladesh. Without them, the goal of building a Smart Bangladesh could be significantly hindered.
ISPAB has called on the Finance Minister and the chairman of the National Board of Revenue (NBR) to reconsider their stance and include all ISP services under ITES to ensure optimal use of the internet and to remove existing obstacles.
The press release highlighted the burdensome 15.50 per cent VAT and duty on essential internet equipment such as modems, Ethernet interface cards, computer network switches, hubs, routers, and server batteries.
Moreover, a staggering 37.5 per cent VAT and duty on Optical Line Terminals (OLTs) is seen as a major barrier to industry expansion. ISPAB has requested this be reduced to 0 per cent in the revised budget to foster industry growth and innovation.
The E-Commerce Association of Bangladesh (e-CAB) has expressed a mixed reaction over the proposed budget for the fiscal year 2024-25, noting the prominence of the Smart Bangladesh plan with the extension of the tax exemption period for the IT and software sectors by three years.
In a press statement, Finance Secretary of ECAB Asif Ahnaf said proposed tax exemption on e-learning and e-applications would significantly aid the sector's development.
However, he called for additional tax exemption for website hosting and cloud services, which are critical to the digital industry.
Ahnaf also stressed the importance of the Business Identity Platform (DBID), which e-CAB proposed to enhance transparency and accountability in digital commerce.
Despite its launch, he noted that e-commerce organisations struggle with DBID due to the absence of a dedicated authority for the digital commerce sector and unclear functionalities of the platform.
Furthermore, e-CAB sees a need for extensive public awareness about their proposed Central Compliance Management System to protect consumer rights after its pilot phase.
Emphasising the role of smart logistics in e-commerce, Ahnaf mentioned e-CAB's cooperation in formulating the government's "National Logistics Policy."
He advocated for a five-year tax exemption for smart logistics companies, along with VAT waivers for warehouse and transportation services.
He also called for the establishment of "smart post offices" in rural areas and tax exemptions for cross-border e-commerce expansion.
bdsmile@gmail.com