Govt backpedals on ICT tax benefit cuts

The government has backtracked on its move to phase out tax benefit from the Information and Communication Technology sector in a bid to facilitate its growth, considering its untapped potential.
In the budget for the next fiscal year, the National Board of Revenue (NBR) is set to extend the tax exemption for ICT sector by three more years, official sources said.
Finance Minister Abul Hassan Mahmood Ali is likely to propose the benefit in the Jatiya Sangsad while delivering the budget speech for FY 2024-25 tomorrow.
The tax benefit was scheduled to expire on June 30, 2024.
Income derived from businesses include AI-based Solution Development, blockchain based solution development, robotics process outsourcing, software as a service, cyber security service, digital data analytics and data science, mobile application development service, software development and customisation, software lab service, web listing, website development and service, IT assistance and software maintenance service, geographic information service, digital animation development, digital graphics design, digital data entry and processing, e-learning platform and e-publication, IT freelancing, call center service, document conversion, imaging and digital archiving will be exempted from tax payment.
However, a condition on cashless transaction has been tagged against the tax exemption benefit.
In the FY 25, tax benefits for private hi-tech park and private economic zones would not continue next year.
For the first time, the NBR is going to introduce prospective tax rates, keeping the tax structure for FY 2024-25, to be proposed, effective for FY 2025-26.
Also, black money whitening facility for both individual and corporate taxpayers would be offered in the upcoming FY.
Black money-holders would be able to declare their undisclosed income by investing in flat, apartment, land, cash or other sectors paying 15 per cent tax.
Under the scheme, taxmen or any of the government entities would not be able to raise question on source of the income.
The tax authorities would also restrict availing tax exemption on same income sources for more than one time. Even, any taxpayer being reconstituted, merged or demerged, would not be able to enjoy tax benefits on same sources income several times.
For petroleum and mineral companies, taxmen would not allow specific allowances as tax-free income.
Individual investors in the capital market would have to pay 15 per cent capital gain tax if their profit exceeds Tk 5.0 million from capital market.
Corporate tax rate for non-listed companies would be cut down by 2.5 per cent in the budget.
One person company would also enjoy a 2.5 per cent cut in their tax rate.
However, tax rate for cooperative societies might be revised upward to 20 per cent.
Source tax on procurement of a number of essential commodities, including rice, wheat and potato, would be halved while import of flower and fruits would be costlier due to a twofold rise in source taxes.
Freight forwarder agencies would see a tax cut while public university, MPO-listed educational institutions see a tax hike.
Business would have to pay up to Tk 50,000 fine in case of failure in displaying proof of submission of tax return in visible places.
Tax-free ceiling for individual taxpayers would remain unchanged in the upcoming FY.

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