BASIS urges govt to reduce increased VAT on internet, phone services

The Bangladesh Association of Software and Information Services (BASIS), the national trade body for the country's IT sector, has appealed for a reduction in the increased VAT on internet and telephone services as stipulated in the Value Added Tax and Supplementary Duty (Amendment) Ordinance, 2025.

In a letter addressed to the Chairman of the National Board of Revenue (NBR) Abdur Rahman Khan on Sunday, BASIS highlighted that the revised ordinance has raised VAT rates under service codes S012.10 and S012.14 to 23% for telephone services and 10% for internet services.

BASIS argued that such increases would hinder the vision of building a technology-dependent Bangladesh.

Currently, over 300,000 young professionals, including 20% women, are engaged in the IT sector, alongside more than 600,000 freelancers who heavily rely on internet services.

The VAT hike, BASIS warned, could have adverse effects on their activities.

The ordinance's VAT adjustments are also expected to negatively impact key sectors like e-commerce, f-commerce, and mobile financial services, crucial for the country's digital economy.

Additionally, a decision to impose VAT registration requirements on IT companies with an annual turnover exceeding Tk50 lakh instead of the previous threshold of Tk3 crore is seen as a major obstacle for small and medium enterprises.

BASIS has urged the government to reconsider these measures, avoid increasing VAT on internet and telephone services, and revert the turnover threshold for VAT registration to support the growth of the IT sector and achieve the goal of a technology-driven Bangladesh.