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Dhaka Tribune

ICT stakeholders demand VAT-free internet

IT sector leaders are optimistic that the government will consider their proposals and demands, before the national budget of fiscal year (FY) 2018-2019 is finalized

Update : 11 Jun 2018, 01:01 AM

Stakeholders from Information Technology (IT) sectors have urged the government to withdraw value added tax (VAT) on internet usage.

Bangladesh Association of Software and Information Services (BASIS) and other IT sector stakeholders made the proposal at a press conference held at National Press Club Sunday.

BASIS President Syed Almas Kabir said: “It is internationally recognized that if the use of internet increases by 10%, the gross domestic product (GDP) of a country will go up by 1%. But in our country, various taxes and charges are the main barriers to internet penetration, affecting the GDP growth.”

Internet usage in Bangladesh is currently subject to 15% VAT, 5% supplementary duty and 1% surcharge.

However, if internet is used on mobile phones, users face 5% supplementary duty and 1% surcharge.

This means a mobile phone user has to spend Tk121.96 to use Tk100 worth of internet.

Syed Almas said our future generation will need better internet services to live in an increasingly virtual society.

“Due to VAT on internet usage, poor people as well as the young generation are being deprived of that. This is why we want VAT-free internet,” he said.

Syed Almas also urged the government to increase VAT on imported software, as local market already develops the same quality.

At the same program Bangladesh Computer Samity (BCS) President Eng Subrata Sarker proposed the withdrawal of 11% VAT on computer and its necessary equipments.

Internet Service Providers Association of Bangladesh (ISPAB) President MA Hakim said: “Government should reduce the cost of fiber optics as they want to boost the information communication and technology sector in every union parishad of the country.”

IT sector leaders expect that the government will consider their proposals and demands, before the national budget of fiscal year (FY) 2018-2019 is finalized.

Earlier, at a pre-budget meeting with stakeholders, Finance Minister AMA Muhith said he will seriously reconsider the existing 15% VAT on internet usage in the FY 2018-2019 budget which is a longstanding demand of the industry, as it would give digitization a boost. 

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