• Wednesday, Nov 20, 2019
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4 ICT trade bodies seek VAT, tax, duty exemption

  • Published at 10:01 pm June 16th, 2019
Four ICT trade bodies seek VAT, tax, duty exemption
Leaders of four IT-related trade bodies at a joint media briefing express their budgetary reactions at the Pan Pacific Sonargaon hotel on Sunday Courtesy

BASIS President Sayeed Almash Kabir hailed the government for enhanced allocation for IT sector in the budget

Four ICT-related trade bodies on Saturday demanded exclusion of 11 measures, including 7.50% Value Added Tax (VAT) on digital commerce and 5% Advance Income Tax (AIT) on computer parts and hardware items from the proposed budget for 2019-20 fiscal year.

The demands were made at a joint press conference of the trade associations at the Pan Pacific Sonargoan in the capital. They are: Bangladesh Association of Software and Information Services (BASIS), Bangladesh Computer Samity (BCS), Internet Service Providers Association of Bangladesh (ISPAB), and Bangladesh Association of Call Centre and Outsourcing (BACCO).

VAT Exemption for Online Business

In the written reaction to the proposed budget, leaders of the sector have said the proposed budget has imposed 7.5% VAT on digital commerce (online business) from the existing 5% VAT. They demanded VAT exemption for the sector for the next few years.

RD exemption from Fibre Optic Cable

The demanded exemption of the proposed 5% Regulatory Duty (RD) on fibre optic cable. The leaders say currently the country has only 5% internet penetration, and the duty measure will slower the growth of popularizing internet, effecting business and industrialization.

VAT exemption for NTTN

The draft budget reduced VAT on Nationwide Telecommunication Transmission Network (NTTN) from 15% to 5%. The trade bodies demanded full exemption of VAT for the sector to cater to more people in the country, particularly the rural people.

Change in the definition of Information Technology Enabled Service (ITES)

They wanted all information related products to be brought under the definition of ITES. Currently, only software development and customization and website development and services fall under the ITES.

Simplification of tax exemption certificates

The trade bodies demanded for automation and introduction of latest software technology for issuing tax exemption certificates to avoid hassle and time. Under the planned system, applicants will get the certificates within one month of their application.

Bringing all ICT products under uniform customs duty

Currently security software is subject to higher import duties, while IT related products are levied duties at different rates. The trade bodies demanded lower rate of customs duty, and uniform rate for all such products in the original budget.

New HS Code for Software

They demanded a new HS code for software import through e-delivery to facilitate hassle-free importation.

Tk200 crore budget allocation 

To upgrade and develop the information technology sector, the leaders has sought an allocation of Tk200 crore under the head of Technical Assistance Project and another Tk300 crore for outsourcing.

AIT   withdrawal

The trade organizations at the post-budget reaction sought the proposed 5% AIT withdrawal from imported computer, computer parts and other related software.

Reducing VAT on computer sale

The draft budget has increased VAT on supply or sales of computer from 5% to 7.5%. To implement Digital Bangladesh goal of the government, business leaders say the enhanced VAT should be excluded in the budget.

VAT exemption for 24 inch computer monitor

Currently, VAT is exempted for monitor up to 22 inches. The leaders sought the exemption to be raised up to for 24 inches.

In the briefing, BCS President Shahid-ul Monir said the VAT exemption should continue on computer and other instruments to  prompt digitalization. He said hardware sector and IT infrastructure were neglected in the budget.

BASIS President Sayeed Almash Kabir hailed the government for enhanced allocation for IT sector in the budget.  

He said the draft budget made additional allocation of Tk2176 core  for the IT sector, and Tk100 crore as start-up fund.

He, however, said many of their recommendations were rejected in the draft budget.