Budget will raise costs of ICT products, services: ICT industry

The proposed budget for the 2023-24 fiscal year did not reflect the proposals of the information and communication technology (ICT) sector as expected and it is inconsistent with the government's "Smart Bangladesh" vision, said the ICT sector leaders.

At a joint press conference held at the Bangladesh Association of Software and Information Services (BASIS) auditorium on Sunday, they demanded the proposed budgetary measures, which would increase the industry cost and the prices of ICT products and services, to be repealed, alongside urging for extension of supportive measures.

BASIS President Russell T Ahmed said the biggest ever Tk7.62 lakh crore budget allocated a higher amount for the ICT sector but in reality, there was no good news for the industry.

During the formulation of the budget, the industry made proposals to extend their corporate tax exemption till 2030, to withdraw the value-added tax (VAT) on software and IT-enabled services, doubling the cash incentive against software and IT services exports to 20% alongside incentivising local software purchases.

However, none of the proposals were taken into account, instead, the government imposed a 5% VAT on local software that would reduce the local industry's competitiveness against imports, said Ahmed.

Besides, import duty on operating systems, databases and security software has been increased from 5% to 25% despite no local alternative, the BASIS president added.

Bangladesh Computer Samity (BCS) representative said, "We are completely disappointed. The current total tariff is 26% as a result of the imposition of 15% duty on imports of laptops, FMC printers and toner cartridges in the outgoing fiscal year, which were proposed to be withdrawn in the upcoming fiscal year."  

Bangladesh Association of Contact Center and Outsourcing (Bacco) President Wahid Sharif said, "As international buyers get business process outsourcing services from Bangladesh at a relatively low price, the country is currently in an important position in the international ICT services market and the proposed budget would raise the cost of the industry."

"As a result of the corporate tax exemption earlier, employment in this industry has grown from just 300 to more than 70,000 people today," he said.

Internet Service Provider Association of Bangladesh (ISPAB) President Md Imdadul Hoque said, "Despite the prime minister's directives, the proposed budget neither considered ISPs a part of ITES that would help enjoy tax exemption nor did it reduce the duty on materials used while the sector was still paying a 10% advance tax on broadband internet services."

e-Commerce Association of Bangladesh (e-CAB) Vice President Mohammad Shahabuddin thanked the prime minister for recognising the e-commerce marketplace that would help limit the platform companies' VAT only on their actual value addition.