ICT needs more support for global competitiveness: Experts
PRI Executive Director and Economist Ahsan H Mansur in his keynote said, “The National Board of Revenue should assess how many of the industry players would sustain a regular income tax in the international competition context."
Considering both the track record and potentials to contribute to the economic development through technological progress, job creation, import substitution and export earnings, the ICT sector of Bangladesh should be incentivised more, instead of reduction, according to experts.
The roundtable discussion jointly organised today (11 June) by the Bangladesh Association of Software and Information Services (BASIS) and the Policy Research Institute (PRI) titled "Importance of ICT for Economic Growth in Bangladesh" outlined the achievements of the sector alongside the key challenges and ways to overcome them.
PRI Executive Director and Economist Ahsan H Mansur in his keynote said, "The National Board of Revenue should assess how many of the industry players would sustain a regular income tax in the international competition context.
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The levied 5% value added tax on local software should be removed for the homegrown industry's competitiveness as they have other limitations
"Already contributing 1.25% to the national GDP the sector created 3 lakh jobs and helped a huge import substitution in the approximately $2 billion local market alongside its over $1.8 billion export earnings.
"...Over 96% of the national ICT services demand is being met by the local industry."
ICT enabled Bangladesh to become a source of a gigantic 6.5 lakh online freelancers and the country is already in the top nine in terms of their growth in numbers," he added.
Alongside catering to the booming national ICT market demand, ICT export can grow ten times if the sector is taken care of, he noted.
A potential tax burden, high costs, limited access to finance and insufficient incentives compared to many neighbouring countries are hindering the sectors' road to success when the nation is chasing its Smart Bangladesh by 2041 dream, according to the speakers.
The roundtable suggested for ICT tax holidays till 2031 or until the country becomes a middle income one, and then a small tax for the next decade.
The roundtable suggested that for the sake of global competitiveness, the cash incentive against ICT exports should be 20% while it saw a cut to 8% from 10%. ICT freelancers' foreign income incentive should be restored to 4% from the deducted rate of 3%.
The levied 5% value added tax on local software should be removed for the homegrown industry's competitiveness as they have other limitations, speakers said, adding also the government procurement of software should mandatorily include the local industry as partners of vendor firms.
Women make 20% of the ICT workforce in Bangladesh and there needs incentives to increase their participation. A Tk300 crore fund for concessional loans to them can be built, the speakers suggested.
The digital literacy and tech infrastructure issues should be addressed, especially the urban-rural gap.
The discussion moderated by BASIS Vice President (Administration) Syed Mohammad Kamal was attended by BASIS President Russell T Ahmed, Additional Director of Bangladesh Bank's Payment Systems Department Mohammad Nazim Uddin, BASIS Senior Vice President M. Rashidul Hasan, Vice President (Finance) Iqbal Ahmed Fakhrul Hasan, BASIS Directors Mostafizur Rahman Sohel, M. Asif Rahman, Dr. Muhammad Risalat Siddique, Mir Shahrukh Islam, and Biplob Ghosh Rahul, Director of SMAC Advisory Services Limited Snehashish Barua, BASIS members, and invited discussants.
