Although the proposed budget for FY23 has gotten many things right, there are areas where we have regrettably taken massive steps backward. The IT sector is such an area that will suffer due to the illogical taxes imposed on it, with a 15% VAT being imposed on crucial digital components such as laptops and printers.
The budget also excluded internet services from the list of IT enabled services (ITES), which would have exempted ISPs of a 10% advanced-income tax (AIT), making broadband internet services much cheaper.
There can be a lot of speculation as to why the authorities undertook such a move; but whatever the short-term benefits, this will surely harm us in the long run, as such taxes stand counter to the government’s grand plans of digitizing the entirety of the nation by 2041.
As a lot of crucial components of the IT sector are not built in Bangladesh, the proclamations by the authorities and the taxes they have imposed seem contradictory. Which is why these taxes will work more as a barricade then an incentive towards our path to digitization. Local laptop manufacturers are far behind global manufacturers when it comes to producing laptops and other devices, and there have been allegations that the quality of the locally made products are nowhere near their advertised capabilities.
A local industry should be shielded from foreign competition when both of them are on par with each other, not when the local industry engages in malpractices such as this. We also need to make the internet readily available throughout the nation, and exempting them of the 10% tax would go a long way towards this goal. But, with the exclusion of the ISPs from ITES, it seems like our dream of a fully connected Bangladesh will have to remain in the backburner for at least another year.
A nation’s digitization can only be made possible when it is equitable and accessible to the masses. The authorities need to take a long, hard look at the current situation and roll back policies which can only harm us in the long rum.
If we want to be a digital nation, then we must let technology thrive.
