Turnover tax for start-ups falls by 0.6%

Finance Minister AHM Mustafa Kamal has proposed to reduce the turnover tax for startups by 0.6% in the fiscal year 2022-23.

The minister has further proposed to exempt start-ups from submitting all types of reports except income tax return.

AHM Mustafa Kamal said this during while placing the national budget 2022-23 in parliament on Thursday (9 June).

The turnover tax is set at 0.1% following a 0.6% decrease from the earlier tax rate set at 0.7%

The minister said, "This is the age of information and communication technology (ICT). The present government is putting special emphasis on the ICT sector. With a view to facilitating the endeavour of the government to build a digital Bangladesh in all its dimensions, start-up initiatives should be supported by providing special incentives."

He proposed to allow start-up companies to carry forward losses over a period of nine years.

Kamal also proposed to withdraw restrictions on expenditure to allow start-up entrepreneurs competitive advantage to expand their business in the global arena.

The finance minister further said in his budget speech, "Startup Bangladesh Ltd, IDEA project and Bangabandhu Innovation Grant (BIG) have been established to inspire innovation."

As a result of taking such initiatives by the government, the startup ecosystem is gradually developing across the country.

At present, there are more than 2,500 startups in the country. About 1.5 million people have been directly and indirectly employed in the startup sector, he added. 

He also spoke about the government's future plan about start-ups.

"Our future plan is to increase exports in ICT sector to $5 billion and IT-based employment to 30 lakh by 2025 and to execute this plan, adequate budget is being allocated for this sector," he said.

This is the fourth budget of the third consecutive term of the government led by Prime Minister Sheikh Hasina and also the overall 51st budget of the country.

The proposed budget is Tk74,383 crore higher than the original budget size of the FY2021-22 fiscal year, which was Tk6,03,681 crore.