ICT trade bodies demand tax exemption until 2031
In FY25, 10% advance income tax on internet services should be abolished or reverted to 4% as before, they say
The leaders of ICT trade organisations have urged the government to extend the tax exemption facility for the software and information technology-enabled services sector until 2031 to continue growth in achieving the government's Smart Bangladesh vision by 2041.
They said as the tax exemption facility is set to expire in June this year, investors are not interested in any long-term investment in the sector.
The annual domestic market size of the sector is around $1.5 billion, while exports have reached around $1.9 billion. The continuation of the tax exemption is a must in achieving the government's target of $5 billion export revenue from the sector by 2029, they added.
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"As the government wants to transform the country into a Smart Bangladesh, continuing tax exemptions in the sector is more important than ever. We demand tax exemption on the IT sector till at least 2031," Bangladesh Association of Software and Information Services President Russell T Ahmed said at a press briefing held at the association's Karwan Bazar office on Thursday.
If the tax exemption period is not extended, there will be disruption to overall export earnings and new job creation.
He said if the IT sector is brought under tax, it could threaten the growth of this potential sector.
In his speech, Bangladesh Computer Samity President Subrata Sarkar said, "Foreign investors invest in Bangladesh's ICT sector with a long-term view. As the industry has only just started to take off, there is no option other than continuing the tax exemption."
Internet Service Provider Association of Bangladesh President Md Imdadul Hoque said for the desired development of the information technology-enabled services sector, it is very important to keep the tax exemption facility until 2031.
He said at present internet service providers are facing losses due to an additional 10% advance income tax on internet service bills. "In the financial year 2024-2025, we demand that 10% advance income tax on internet services be abolished or reverted to 4% as before."
Bangladesh Association of Contact Centre and Outsourcing President Wahid Sharif said the current prosperity observed within the IT sector owes its success to the provision of tax exemptions.
"If the tax exemption period is not extended, there will be disruption to overall export earnings and new job creation, while new entrepreneurs will lose interest in investing in the industry."
E-Commerce Association of Bangladesh Senior Vice President Mohammad Shahabuddin said the sector needs special care and facilities for some more time due to changes in technology and other related conditions. Tax exemption is one of them.
Earlier, on 10 March, leaders of five IT-related organisations, including the Bangladesh Association of Software and Information Services, wrote to Finance Minister Abul Hassan Mahmood Ali demanding the tax exemption extension.
Withdrawal of the exemption could lead to a decline in the sector's growth, investment and exports, they said in the letter.
