Introducing 15% VAT on imported laptops, printers and cartridges will limit automation

The proposed 15% VAT on imported laptops, computer printers and toner cartridges in the FY23 budget will limit the growth of automation, said Bangladesh-Malaysia Chamber of Commerce and Industry  (BMCCI) President Syed Almas Kabir.

"I have been expecting that the government would formulate the next national budget in the spirit of Digital Bangladesh. Unfortunately, the extra VAT on mobile-based services including mobile banking, ride-sharing, etc. seems to be in contradiction of it," he said. 

He welcomed the finance minister's proposal of exemption for startups on all types of reporting besides tax returns, saying it will ease the challenges they face.

"Also, allowing them to set off and carry forward losses for nine years, and withdrawal of restrictions on expenditure will facilitate the young entrepreneurs to grow their businesses. Lowering of the turnover tax to 0.1% from 0.6% for the startup companies will be a great help for the budding businesses," he added. 

Syed Almas Kabir further said: "However, it is very much discouraging to see the internet services has not been included in the list of IT Enabled Services in spite of being the primary ingredient of Digital Bangladesh. Even though it has long been proposed, I see no such mention. This would exempt the ISP's from corporate tax including the 10% AIT, and would make broadband internet significantly cheaper for the end-users. Expansion of broadband internet connectivity will increase economic activities in the remote areas. Affordable broadband internet would generate new businesses including increased digital commerce, ICT freelancing, ITES export, etc."

5% VAT on co-working space will also be a burden to the entrepreneurs and startups, he added. 

"I expected the government would waive the 10% AIT on ITES and 5% VAT on software to encourage the local IT industry and make them competitive over foreign software & services, but I have not seen any such measure. The proposed incentive on digital payment would have pushed us towards the coveted cashless economy, but there is no such provision. Moreover, the mobile banking operation have been burdened with 12% VAT, he noted. 

The BMCCI president said that he hopes policymakers will consider the relevant points and finalise the National Budget for the FY 2022-2023 according to the government's mandate of creating a Digital Bangladesh having a cashless economy and a knowledge-based society.