The government plans to provide the local start-ups with more room to grow with the benefits like easing restrictions on their expenditure and lowering tax on their turnover, the finance minister said.
"I propose to withdraw the restrictions on expenditure and fix the rate of turnover tax at 0.1 per cent in place of 0.6 per cent," the minister said in his budget speech on Thursday.
Highlighting the importance on Information and Communications Technology (ICT) at present, he said the government is putting special emphasis on the ICT sector.
Start-up initiatives should get support from the government to facilitate its endeavour to build a digital Bangladesh in all dimensions by providing special incentives.
"I propose to exempt the start-up businesses from the bindings of all other types of reporting except submitting income tax return," the minister said. He also proposed "to allow start-up companies to set off and carry forward losses over a period of nine years."
Such measures will help the local start-up entrepreneurs expand their business in the global arena, the minister said.
Meanwhile, the stakeholders have hailed the announcement in the budget.
In his instant reaction, former BASIS president Syed Almas Kabir said the proposed exemption for start-ups on all types of reporting besides tax return will ease the challenges they face.
"Lowering of turnover tax to 0.1 per cent from 0.6 per cent for the start-up companies will be a great help for the budding businesses," said Mr Kabir, also president of Bangladesh-Malaysia Chamber of Commerce and Industry (BMCCI).
While commenting on ICT-related services, he said it was very much discouraging to see that internet services had not been included in the list of IT Enabled Service (ITES) in spite of being the primary ingredient of digital Bangladesh.
"Affordable broadband internet would generate new businesses including increased digital commerce, ICT freelancing, ITES export, etc," he said.
Imposing 15 per cent VAT on imported laptops, computer printers and toner cartridges will limit the growth of automation, he added.
"Five per cent VAT on co-working space will also be a burden for the entrepreneurs and start-ups," he said.
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