BMCCI for widening scope for local IT industry

The Bangladesh-Malaysia Chambers of Commerce and Industry (BMCCI) has urged the government to waive 10 percent AIT on ITES and 5 percent VAT on software to encourage local IT industry and make them competitive over foreign software and services.

“I had expected the government would waive the 10 percent AIT on ITES and 5 percent VAT on software but I did see any such measure in the proposed budget,” BMCCI President Syed Almas Kabir said on Thursday.  

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 operations have been burdened with 12 percent VAT, said Kabir, in his instant reaction on the national budget for fiscal 2022-23.

Kabir, however, thanked the finance minister for the proposed exemption for start-ups on all types of reporting besides tax return 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, he added.

Lowering of the turnover tax to 0.1 percent from 0.6 percent for the start-up companies will be a great help for the budding businesses, he said.

“I welcome the finance minister’s initiative to start a study on digital currency. Blockchain-based digital currencies will accelerate the economy as well as ensure transparency,” he said.

He said the internet service has not been included in the list of IT Enabled Services in spite of being the primary ingredient of Digital Bangladesh.

This would exempt the ISP’s from corporate tax including the 10 percent 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.

Introducing 15 percent VAT on imported laptops, computer printers and toner cartridges will limit the growth of automation, the business leader said.

“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 and ride-sharing, etc. seems to be in contradiction of it.

“Furthermore 5 percent VAT on co-working space will also be a burden to the entrepreneurs and start-ups,” he said.