Welcome to Business Outlook
Related Articles
Four trade bodies of the information technology sector on Sunday urged the government to grant the evolving e-commerce sub-sector a respite from the additional tax burden which was slapped on it in the proposed budget for 2019-20.
Finance minister AHM Mustafa Kamal proposed the budget for 2019-20 on Thursday last.
The leaders of the trade bodies said that the progress of the ICT sector as well as the government move towards digitisation would be hampered due to the increased cost of digital services if the proposed additional tax rate remained in the final budget.
They made the request at a post-budget press briefing at Hotel Sonargaon in the capital.
Bangladesh Association for Software and Information Services (BASIS) president Syed Almas Kabir, Bangladesh Computer Samiti president Md Shahid-ul-Munir, Internet Service Provider Association Bangladesh president MA Hakim and Bangladesh Association of Call Centres and Outsourcing president Wahidur Rahman Sharif spoke at the briefing.
A demand was also placed at the briefing for exemption of value added taxes from the digital services for the next five years.
Decrying the 7.5 per cent VAT imposed on the virtual businesses, they said that the proposed budget did not fulfil the expectations on the digital services.
Regretting the 2.5 per cent increase in the VAT on the virtual businesses, the leaders urged the government to waive even the existing 5 per cent VAT on the sector.
‘Shoppers have just started to spend through the digital platforms,’ said Syed Almas Kabir, adding, ‘First we need to give them the time to grow and then the issue of tax can come.’
Expressing satisfaction over the overall budget and welcoming the Tk 100-crore budgetary allocation for business start-ups, the BASIS president also requested the government to create an other fund to help the outsourcing industry.
‘We have already talked to the ICT state minister and he has promised us to place our demand to the high-level policy makers of the government,’ Almas said.
Apart from these taxes, the finance minister also proposed to increase import taxes on smartphones by 15 percentage points to 25 per cent from the current 10 per cent, which might be a disaster for the overall internet industry, said the BASIS president.
‘It is true that some five companies have started assembling handsets in the country but they can hardly supply only 30 per cent of the sets and the rest 70 per cent are imported,’ he said, adding that the decision would increase the handset cost by at least 20 per cent.
‘Surprise taxes always confuse the businesspeople and we want a surprise-free tax policy,’ he said further.
The BASIS also demanded a revision of the definition of Information Technology-Enabled Services.
The leaders of the associations viewed that the imposition of 5 per cent regulatory duty on optical fibre cable would create a hindrance to the expansion of broadband internet in the rural areas thereby widening the digital divide.
MA Hakim has raised their concerns over the proposed increase in VAT on fiber cable, too, which is the backbone of the digital ecosystem.
‘This step will definitely increase our cost of doing business and that will pass the additional cost on the customers who are using broadband services,’ said Hakim.
Shahid-uL-Munir said that the proposed 5 per cent advance income tax would increase their business cost while he also criticised the increased VAT on the sale or distribution of imported computers and computer-related hardware up to 7.5 per cent from the present 5 per cent.
source (NA)
