Information technology (IT) entrepreneurs in Bangladesh sought an extension to the tax exemption for another three years in the upcoming national budget.
They also said that extending the tax exemption is vital to the growth and success of the country's information technology sector.
Salman F Rahman, private industry and investment advisor to the PM, has also expressed support for the demand.
The businesses raised this demand at a roundtable titled “Investment Climate for Smart Bangladesh” organized by Venture Capital and Private Equity Association of Bangladesh (VCPEAB).
In his speeches as chief guest, Salman F Rahman said that this is not the suitable time to withdraw tax exemption from the IT sector, rather they see whether more incentives can be offered.
“I will talk to the prime minister and finance minister regarding this matter. The entire matter depends on the prime minister,” he added.
“I believe there is no unemployment in the country, there is a scarcity of skilled workforces in both industrial and manufacturing sectors,” he said.
He also said that there is no quality research in the country's universities despite the government providing ample opportunities.
“Even there are no sufficient specialized departments on ICT to keep pace with the modern world. Students are being graduated in general education without any kind of career plan,” he added.
He also said that there is a shortage of trained certified electricians, plumbers and other professionals but students don't go for vocational education, he added saying that there is a need to change the mentality first.
Startup entrepreneurs should not only depend on bank loans, they should also attract angel capital from NRBs and they also should go for joint ventures with large companies.
“Funds and grants are not issues at all if you are capable and efficient,” he added,
He also urged the NBR to enhance the tax net as NBR only receives tax from the old taxpayer, they can’t bring new taxpayers under the tax net.
ICT State Minister Zunaid Ahmed Palak said, he agreed with the logical demands of ICT businesses regarding the tax exemption and the tax exemption in the IT sector should remain as it is and he sought the assistance of Salman F Rahman in this regard.
“The government expects to export $5 billion in this sector by 2029. For this, a tax exemption facility is required in this sector. NBR needs to formulate policies for the IT sector in three phases till 2026, 2031 and 2041,” he added.
He also said that resources are important to attract investment in the IT and ITES sector, so industry-academia relations are important.
“All digital service providers should be interconnected. The NBR should be smart and their thought process,” he added.
It is possible to attract $1 billion FDI, one million job creation of the policy is changed in a proper way.
The current tax exemption period in the IT sector is scheduled to end on June 30, that is why the heads of technology organizations demanded an extension.
Kazi Nabil Ahmed, MP, said that tax benefits are crucial for growing industries like technology.
“To ensure a smart Bangladesh, we must establish a knowledge-based ecosystem that penetrates every segment. It's imperative to leapfrog certain stages to bridge the gap with other countries; otherwise, we risk falling behind continuously,” he added.
He also said that the vision 2021 has been materialized and the Smart Bangladesh vision of 2041 will also be possible through smart government and smart citizens as smart Bangladesh is important in all sectors like healthcare, education, sports and others.
“Entrepreneurs need to be more proactive in order to build an entrepreneurial workforce. For this, necessary policies should be adopted so that Smart Bangladesh is visible,” he added.
Ferdous Ahmed MP of Dhaka-10, said that there is a multibillion-dollar media, entertainment and technology industry.
“We need to digitize this industry in order to attract foreign investment. We can introduce e-ticketing systems in cinema halls to make it more transparent,” he added.
Zara Jabeen Mahbub, MP and VCPEAB advisor stated that in order to achieve a truly smart Bangladesh, it is imperative that we do not overlook the pivotal role of women.
“Their inclusion is paramount. By prioritizing women's participation, particularly through healthcare digitization initiatives, we can not only enhance women's health but also effectively realize the vision of a smart Bangladesh,” he added.
eGeneration Limited Managing Director Shameem Ahsan said after three years of tax exemption, a tax of 1% to 2% per annum may be imposed.
He said Bangladesh's GDP growth in the IT sector is 1.09%, while the Philippines is 3.40%, Indonesia 4.23%, Estonia 7.00%, and India is 7.40%. Therefore, government policy support is needed here, he added.
Raisul Kabir, chief executive officer of Brain Station 23 Ltd said: "We export software. If tax is imposed in this sector, we will not be able to compete with other countries."
Managing Director of Smart Technologies (BD) Ltd Mohammad Zahirul Islam said the export of ICT products should be made tax-free. In the age of AI, entrepreneurs should be given more facilities.
Leaders from various IT and ITES businesses also spoke at the event.
According to industry sources, the local market size in this sector is around $1.5 billion annually. And the amount of exports is $1.9 billion. The amount of investment in this sector is about $600 million.
