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Leaders representing various ICT industry associations have demanded the extension of the current tax exemption for the sector for the next seven years until 2031, with the aim of implementing the government's vision of a Smart Bangladesh.
Urging the government to refrain from curtailing the tax benefits, they feared that such probable actions would hinder the growth of the domestic private ICT sector and jeopardise the retention of highly valuable foreign currency within the country.
They raised their demand during a press conference held at the BASIS Auditorium on Thursday, citing concerns about the impending expiration of the ongoing corporate tax exemption for the ICT sector in June 2024.
Bangladesh Association of Software and Information Services (BASIS), Bangladesh Computer Samity (BCS), Bangladesh Association of Contact Center & Outsourcing (BACCO), Internet Service Provider Association of Bangladesh (ISPAB) and e-Commerce Association of Bangladesh (e-CAB) jointly organised the press conference.
BASIS President Russell T. Ahmed, BCS President Subrata Sarkar, BACCO President Wahid Sharif, ISPAB President Md Imdadul Hoque and e-CAB Senior Vice President Mohammad Shahabuddin spoke at the meeting and gave their proposal on behalf of their respective associations.
Speaking at the BASIS press conference, Russell T. Ahmed said, "If the IT sector is brought under tax, it will not even be 1.0 per cent of the total revenue income. The IT sector is just starting to take off, as we race ahead. At this time, it is not right to threaten a potential sector only for this small income of the government".
As the government wanted to transform the country into a smart Bangladesh, continuing tax exemptions in this sector is more important than ever, he stated.
"We are demanding tax exemption on the IT sector till at least 2031 and BASIS has spoken to senior government officials as well as sent formally written letters in this regard", Russel said.
Subrata Sarkar emphasised the necessity of continuing the tax exemption for Bangladesh's local ICT sector, citing the sector's nascent growth and long-term investment potential for foreign investors.
Imdadul Hoque emphasised the crucial necessity of maintaining the tax exemption facility until 2031 for the desired development of the ITES sector.
Additionally, he urged all Internet Service Providers (ISPs) to integrate the Internet Service Providers Association of Bangladesh (ISPAB) industry into the Information Technology Enabled Services (ITES) sector, noting the increasing import dependency of the ISP sector and the challenges posed by the current competitive internet service landscape.
Wahid Sharif emphasised the vital role of tax exemptions in the IT sector's prosperity.
Without extension, disruption to exports, job creation, and investment interest looms, stalling industry growth and risking widespread unemployment was hindering future economic progress, Sharif added.
Shahabuddin said, "Technology sector needs special care and facilities for some more time due to changes in technology and other related conditions. Tax exemption is one of them. Through this the sector will become sustainable and capable".
According to industry insiders, at present, the annual domestic market size of the software and ITES sector is around $1.5 billion, while exports have reached around $1.9 billion.
Vision 2041 aims to implement a Smart Bangladesh, including achieving a $5.0 billion export revenue target from the IT sector by 2029, building world-class IT capacity, ensuring foreign currency reserves, fostering domestic IT growth and expanding the local market gradually.