The government is likely to consider providing tax benefits to local manufacturers of ICT products in the upcoming budget for fiscal year (FY) 2022-23, while imposing high taxes on import of finished goods, sources said.
The imports of raw materials for ICT products would also be facilitated through awarding tax waivers while the completely built units of laptop, desktop, printers, etc. would have to bear higher import taxes.
The measures are set to be included in the national budget scheduled to be placed before parliament on June 9, 2022, aimed at developing the 'Made in Bangladesh' brand of the ICT products, said the sources.
Currently, import of laptop, desktop, printers and other finished computer and ICT products are subject to pay only 5.0 per cent duty.
The government may scrap the existing tax provision and impose higher duty on those finished products to facilitate and develop the local hardware industry.
Import of finished laptop may require paying 20 per cent duty in FY 2022-23.
Raw materials of computers and its spare parts required for digital devices are set to be incorporated in the Finance Bill-2022, with VAT waiver on imports, to facilitate local production, sources concerned said.
In the budget for the outgoing FY, the government awarded a tax holiday facility for attracting investment in different manufacturing areas under the 'Made in Bangladesh' logo.
Officials said the National Board of Revenue (NBR) has actively reviewed a proposal of the state minister for ICT Division Zunaid Ahmed Palak in this regard and may offer VAT exemption on some of the ICT parts in the new budget.
In an official letter on April 19 last, addressing NBR chairman Abu Hena Md Rahmatul Muneem, Mr Palak proposed to include the raw materials required for manufacturing computer, PCB IT, IOT and digital devices with 'Made in Bangladesh' tag in the relevant SRO of the VAT law to offer exemption at import and local stages.
Currently, VAT exemption is applicable partially on some ICT products while many of the raw materials are excluded from the benefit, industry insiders said.
Manufacturers are not being able to avail the tax benefit fully under the partial VAT exemption scheme, causing price hike of the locally produced computers and accessories, they added.
Local manufacturers of ICT products are facing uneven competition in the international market, they said.
"We have to develop the ICT product importers as the exporters of the products through offering fiscal benefits so that they can stand high with self-esteem in the international market," Mr Palak wrote.
Achieving the target has become difficult as most of the raw materials, except computers and some specific spare parts, are not exempted from payment of VAT, the state minister wrote in the letter.
Production of ICT products is difficult as well as local investment in this sector is at stake, he said, adding the country is spending a huge amount of foreign currency due to import of finished ICT products.
Former vice-president of Bangladesh Association of Software and Information Services (BASIS) Farhana A Rahman has backed the demand for the sake of developing the local hardware industry for the ICT sector.
She, however, laid emphasis on making skills-development efforts along with tax exemption and other fiscal supports to facilitate growth of the ICT industry.
Meanwhile, the government is likely to revise upwards the supplementary duty on import of luxury cars above 2000 CC in the new budget.
doulot_akter@yahoo.com