Waiver of duty, VAT on computer equipment demanded
Wednesday, 2 June 2010
Mehdi Musharraf Bhuiyan
The country's top IT leaders and software developers Tuesday demanded full waiver of duty and Value Added Taxes on computer networking and data communication equipments during the upcoming budget of the fiscal year of 2010-11.
Networking equipments like network switch and hub are essential for creating a strong information and communication infrastructure and therefore it is essential that the prices of networking equipments comes down to an affordable level, the IT experts said.
"At the current stage of our economy, having a strong networking infrastructure in place is the next big step ahead", said President of Bangladesh Computer Samity Mostafa Jabbar, adding "We need to assure faster and efficient internet and other networking services so that the real benefits of information technology reach every corner".
Equipments on which zero percent duty and VAT has been proposed include computer network switch and hub, network router, DSL and broadband router, connecting cable, USB cable, data cable, HDD SATA cable, HDD SATA cable, terminal connector kit, server rack mount kit and computer LAN cable.
Currently three percent to 25 percent duties are imposed on such networking equipments while some of these devices including DSL and broadband router, server rack and computer LAN cable also comes with 15 percent VAT.
The country's top IT trade bodies and organizations have already placed their demands to the Ministry of Finance and other relevant stakeholders and currently their proposals are under government consideration.
"Already a lot has been invested over the years to set up the basic infrastructure for networks in the country", Jabbar said, "The SEA-ME-WEA- 4 submarine cable which has been set up at a cost of Tk. 6.57 billion has created the opportunity to use huge bandwidth".
"But such infrastructure and facilities will not be fully utilized if the price of networking equipments and accessories does not come down to an affordable level", he added.
IT leaders have also proposed zero duty and VAT on all sorts of computer and computer accessories and equipments including computer processors, monitors, motherboards, disk drives, as well as printers, multimedia projectors, mobile phones, digital cameras and CD/DVD Writers.
These equipments are by and large quintessentially integrated with the computing devices and therefore should be considered for zero duty and VAT during the upcoming budget- experts said.
The country's top software and ITES companies have also demanded the incentive of Income Tax exemption for the IT services industry which is allowed till 2011 to be extended until the year of 2015.
Simultaneously, the upcoming budget should give 100% income tax rebate on IT investment by private sector companies- they said.
"The measure will encourage companies to invest more on Software and IT which will help these companies to become more efficient, productive, competitive and profitable", said Habibullah N Karim, former President of Bangladesh Association of Software and Information Services (BASIS).
"This will also enable them to pay more taxes to the government from their additional profit and create a huge number of employments", he added.
IT leaders also demanded clear indications in the budget to strengthen the domestic software industry and to encourage Bangladeshi Software.
"To that end, a certain amount of tax may be imposed on overseas software products, especially on application software. The rate of the tax can be at least 15%", Karim said.
BASIS also proposed the creation of a separate cost head like "Procurement of Software and IT Enables service" in the upcoming budget to monitor the purchases and procurement of software and IT equipments of every Ministry and government department.
This would also create further transparency and accountability in government spending which would ensure that Government agencies are properly investing in software and IT procurement.
IT leaders have also proposed waiver of VAT on software and IT enabled services and also reiterated the demand to create a Tk. Seven billion ICT development fund while urging to withdraw the PSI requirement from import of computer software & hardware items.
They have also urged the allocation of Tk. 400 million for establishing four Software Technology Centres (STC) in four different places of the country, while also proposing to allocate Tk. 209 million to promote Bangladesh as a highly potential ICT outsourcing destination through hosting fairs, digital forums and other various events.
The country's top IT leaders and software developers Tuesday demanded full waiver of duty and Value Added Taxes on computer networking and data communication equipments during the upcoming budget of the fiscal year of 2010-11.
Networking equipments like network switch and hub are essential for creating a strong information and communication infrastructure and therefore it is essential that the prices of networking equipments comes down to an affordable level, the IT experts said.
"At the current stage of our economy, having a strong networking infrastructure in place is the next big step ahead", said President of Bangladesh Computer Samity Mostafa Jabbar, adding "We need to assure faster and efficient internet and other networking services so that the real benefits of information technology reach every corner".
Equipments on which zero percent duty and VAT has been proposed include computer network switch and hub, network router, DSL and broadband router, connecting cable, USB cable, data cable, HDD SATA cable, HDD SATA cable, terminal connector kit, server rack mount kit and computer LAN cable.
Currently three percent to 25 percent duties are imposed on such networking equipments while some of these devices including DSL and broadband router, server rack and computer LAN cable also comes with 15 percent VAT.
The country's top IT trade bodies and organizations have already placed their demands to the Ministry of Finance and other relevant stakeholders and currently their proposals are under government consideration.
"Already a lot has been invested over the years to set up the basic infrastructure for networks in the country", Jabbar said, "The SEA-ME-WEA- 4 submarine cable which has been set up at a cost of Tk. 6.57 billion has created the opportunity to use huge bandwidth".
"But such infrastructure and facilities will not be fully utilized if the price of networking equipments and accessories does not come down to an affordable level", he added.
IT leaders have also proposed zero duty and VAT on all sorts of computer and computer accessories and equipments including computer processors, monitors, motherboards, disk drives, as well as printers, multimedia projectors, mobile phones, digital cameras and CD/DVD Writers.
These equipments are by and large quintessentially integrated with the computing devices and therefore should be considered for zero duty and VAT during the upcoming budget- experts said.
The country's top software and ITES companies have also demanded the incentive of Income Tax exemption for the IT services industry which is allowed till 2011 to be extended until the year of 2015.
Simultaneously, the upcoming budget should give 100% income tax rebate on IT investment by private sector companies- they said.
"The measure will encourage companies to invest more on Software and IT which will help these companies to become more efficient, productive, competitive and profitable", said Habibullah N Karim, former President of Bangladesh Association of Software and Information Services (BASIS).
"This will also enable them to pay more taxes to the government from their additional profit and create a huge number of employments", he added.
IT leaders also demanded clear indications in the budget to strengthen the domestic software industry and to encourage Bangladeshi Software.
"To that end, a certain amount of tax may be imposed on overseas software products, especially on application software. The rate of the tax can be at least 15%", Karim said.
BASIS also proposed the creation of a separate cost head like "Procurement of Software and IT Enables service" in the upcoming budget to monitor the purchases and procurement of software and IT equipments of every Ministry and government department.
This would also create further transparency and accountability in government spending which would ensure that Government agencies are properly investing in software and IT procurement.
IT leaders have also proposed waiver of VAT on software and IT enabled services and also reiterated the demand to create a Tk. Seven billion ICT development fund while urging to withdraw the PSI requirement from import of computer software & hardware items.
They have also urged the allocation of Tk. 400 million for establishing four Software Technology Centres (STC) in four different places of the country, while also proposing to allocate Tk. 209 million to promote Bangladesh as a highly potential ICT outsourcing destination through hosting fairs, digital forums and other various events.