The tenure of tax holiday is going to expire in June this year, discouraging the entrepreneurs from making long-term investment in the country's emerging ICT sector.
Sector insiders fear that withdrawal of tax exemptions may hamper the employment generation in the ICT sector and at the same time, the cost of doing business of local firms will increase significantly. As a result, they will lose their competitive edge in the global ICT market.
ICT experts and analysts opine that there is no alternative but to extend the tax exemptions on the ICT sector, the priority sector as announced by the government, mainly to attract young entrepreneurs, professionals and investors in the ICT business and profession.
Entrepreneurs have, however, demanded that the government extend the tax exemptions on IT-enabled services in the upcoming national budget for the financial year 2024-25.
President of Bangladesh Computer Samity (BCS) Engr Subroto Sarker told Bangladesh Post on Tuesday that the tenure of tax holiday needs to be extended by at least two to three years more.
"We are a bit under pressure due to a rise in dollar price. Besides, the prices of hardware, software and services are going up. The prices will increase further if the tax holiday is over which will put impact on the expansion of digitization," he added.
He said as the government has declared its vision of building Smart Bangladesh and in line with the digitization, the process is going on everywhere. “If we want to provide products and services at reasonable prices or if we go for computerization at school level, we have to enjoy tax holiday facility for at least two to three more years.”
Sources said that the National Board of Revenue (NBR) is planning to withdraw tax exemptions on 27 information technology-enabled services in the next budget. It means that the companies offering these services could be taxed on their incomes starting in the next fiscal year.
Since 2011, the revenue authority has been granting tax exemptions on IT-enabled services, with the period extended every three to five years.
However, there are currently no intentions to extend the exemption beyond its expiration on June 30, the last day of the current fiscal year.
Top IT-related organizations have already wrote to the finance minister, expressing concern that the sector's growth, investment, and export might wane if the exemption is lifted.
The organizations, including Bangladesh Association of Software Import and Service (BASIS), Bangladesh Computer Samity (BCS), Bangladesh Association of Contact Center and Outsourcing (BACCO), Internet Service Providers Association of Bangladesh (ISPAB), and E-Commerce Association Bangladesh (E-CAB), will jointly organise a press conference soon, demanding the continuation of tax holiday.
