Budget did not clarify facilities for local IT firms: Basis vice-president

Local IT companies will find it difficult to flourish as the facilities offered to them in the proposed budget for the fiscal 2021-22 were not clearly mentioned, says Bangladesh Association of Software and Information Services (Basis) Vice-President (finance) Mushfiqur Rahman.

He told The Business Standard in an interview on Sunday that the budget had not clearly specified the allocation for local IT firms in the areas they would work.

"We have been talking to the planning, finance, and IT ministries for the last few years about how to draft the request for proposal (RFP), where the participation of local companies is very important. We have to create a level playing field here."

He said imposing conditions on local companies would create problems. 

"If you want to give a project to a local company under the condition that they need to have work experience in two more countries, such firms will automatically be excluded."

Even if a company has that experience, the budget should reflect how they can involve other local companies in sub-contracting to do the project without bringing in foreign workers, said Mushfiqur.

He said IT training and internet services had not been addressed in the budget. "Internet service still has 15% tax while it is 27% for IT learning. There are cost implications here that have not been addressed."

Speaking about education, he said Tk95,000 crore had been allocated for this sector.

Educational institutions remain closed for over a year and online classes have been offered, but those did not serve students in remote areas because of the digital divide, he noted.

"Money laundering will decrease and the tax net will widen as we move towards a cashless society through mobile financial services," he said.

He also said he had asked the government to offer incentives for mobile financial services. "But that did not happen. Instead, taxes were raised, which will create obstacles."

Mushfiqur said there are lots of scopes for working in different areas in citizen services and government applications and those should be revamped.

"5G is coming and we have to incorporate the required infrastructure."

The Basis official said, "We have been saying it for the last three years that since our foreign reserve is high, the IT sector should be allocated Tk500 crore. If local companies want to do business overseas, they can then easily get loans."

"We want to involve another 25% women in the IT sector. For this, we sought an allocation of Tk300 crore but have not got it yet. We asked for loans on easy terms but did not get that either. If these are done, we will move towards building a digital Bangladesh in the next five years," he added.

The proposed budget offered support in several areas of the IT sector. Tax waiver until 2024 was offered to cloud services, e-learning platforms, e-book publications, mobile application development services, and freelancing.

Mushfiqur thinks this is laudable and the government should be applauded for this.