Freelancers to finally receive 10% cash aid
To receive it, they will need to prove that they have earned by exporting services
Freelancers are finally going to receive 10% cash assistance against their earnings from exporting services, a finance ministry committee has decided.
But to receive this aid, they will have to prove that their income has come from exporting services.
Salman F Rahman, private industry and investment adviser to the prime minister, said how freelancers would prove this is now being finalised.
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The government provides 10% cash assistance for the export of ICT products. It announced the same incentive for freelancers two years ago but could not implement the plan as the finance ministry opposed it.
Officials of the finance ministry and the Bangladesh Bank said State Minister for ICT Zunaid Ahmed Palak had written to Fazle Kabir, the governor of the central bank, in October last year asking for 10% cash incentive to freelancers. When the central bank sought the finance ministry's opinion about this, the Finance Division responded in the negative.
The Finance Division later formed a review committee in December after Salman Rahman's intervention.
Moreover, the finance ministry requested the Finance Division last month to provide 10% cash assistance to freelancers. The committee then finalised its report by recommending this much incentive.
The central bank will issue a circular in this regard after receiving the recommendation.
Officials of the finance ministry and the central bank favoured providing 2% cash assistance to freelancers, similar to remittances sent by expatriates. They said the government audits organisations that receive cash assistance. If any irregularity is detected there, banks that provide this assistance have to return the money to the government.
Since freelancers do not work in offices, it is difficult to audit whether or not they have exported services.
But freelancers say exporting services is more important than exporting goods as exporting services does not require importing raw materials, unlike exporting goods.
That is why there is no way to show freelancers' earnings as remittances. They have to be considered as exports and so a 10% cash incentive, like ICT product exports, has to be made available.
Salman Rahman said there were about 10 lakh freelancers across the country who are utilising the advantages of Digital Bangladesh to earn foreign currency even by living in villages.
He said many educated graduates were choosing freelancing as a profession after receiving training.
"Freelancers had complications in opening bank accounts. The government has now removed those and is also giving them identities through registrations. A 10% cash incentive will create huge employment and will add a new dimension to service exports," he added.
According to the central bank, $265 million in export earnings came through banking channels in the ICT services (IT-enabled services, including business process outsourcing, software and computer consultancy services) sector in the last fiscal year.
Of this, $172 million came from computer data processing and hosting services. Companies exporting such services received 10% cash assistance against their exports.
But freelancers do not receive any cash assistance even though they earn foreign currency by exporting these services.
The Bangladesh Bank and the Export Promotion Bureau have no information about the actual earnings of freelancers.
In the 2019-20 fiscal year, Bangladesh earned $73 million from computer software exports and $20 million from computer consultancy services. Exporters received 10% cash assistance for their performance.
From July to October of the current financial year, $88 million was earned through export of ICT services. Of this, $59 million came from IT services, $20 million from computer software and about $9 million from computer consultancy services.
