Tax exemption for IT sector till 2031 demanded

The leaders of the Bangladesh Association of Software and Information Services (BASIS) have demanded a continued tax exemption for the information technology (IT) sector till 2031 next.

They raised the demand at the oath-taking ceremony of the newly elected Executive Council (2024-2026) of BASIS.

The newly elected BASIS leaders formally took charge on Tuesday (May 21) taking oath to achieve self-sufficiency in software production to implement the Smart Bangladesh vision.

A Towhid, founder president of BASIS, administered the oath taking ceremony of the newly elected executive council at Hotel Radisson Blu in the capital.

Salman F Rahman, the Private Industry and Investment Adviser to the Prime Minister, was present as the chief guest at the event also attended by State Minister for Posts, Telecommunication and Information Technology Zunaid Ahmed Palak and State Minister for Commerce Ahasanul Islam as special guests.

FBCCI President Mahbubul Alam was the guest of honour at the oath taking ceremony which was also attended, among others, by former BASIS presidents Sarwar Alam and Rafiqul Islam, outgoing executive council members, former executive committee members, representatives of BASIS member companies, and officials of various embassies in Bangladesh.

At the ceremony, Russell T Ahmed, president of BASIS, M Rashidul Hasan, senior vice-president of BASIS, Syed Mohammad Kamal, vice president (admin) and Iqbal Ahmed Fakhrul Hasan, vice-president (finance), and the newly elected directors of BASIS Md Mostafizur Rahaman Sohel, Didarul Alam, M Asif Rahman, Dr Muhammad Risalat Siddique, Mir Shahrukh Islam, Biplob Ghosh Rahul and Syed Abdullah Jayed took oath.

As Russell T Ahmed has been re-elected as the BASIS president, outgoing vice-president (admin) Abu Daud Khan and vice-president (finance) Fahim Ahmed handed over the BASIS flag to him at the ceremony. Later, the members of outgoing executive council, BASIS election board and appeal board were felicitated for their contribution.

Samira Zuberi Himika, the outgoing senior vice-president of BASIS, delivered the welcome address on the occasion.
Speaking at the event, Russell T Ahmed said, ‘We have noticed a number of inconsistencies in the NBR regarding tax exemptions in the IT sector. According to them, the IT sector makes a profit of Tk 5,000 crore and the revenue of this industry is Tk 50,000 crore. But, in reality, the total turnover of this sector is Tk 2,000 crore only. Once this anomaly is removed, we think the IMF will lose interest in taxing this industry. In this case, we are demanding tax exemption till 2031 considering the potential of this sector.”

He said, “The ICT sector will be the nucleus for the implementation of Smart Bangladesh. To achieve this goal by achieving self-sufficiency in the local market and moving towards the $5 billion target, we feel that the government should set a target of self-sufficiency in the IT sector by 2041 through formulating a policy. In this case, considering the capabilities of Bangladesh's technology institutions, foreign institutions should not be used for public and private procurement. In cases of developing new technology where we are dependent on foreign companies, a domestic company should be made local partner mandatorily.”

“Doing these two things at the same time will help us create skilled manpower. Besides, foreign direct investment and local investment will be encouraged,” he added.

FBCCI President Mahbubul Alam said the ICT sector is one of the most important factors of Bangladesh's economy. The role of this sector is immense in the implementation of Smart Bangladesh vision. Hopefully, the newly elected executive council of BASIS will play an important role in developing the indigenous software industry, leading to self-sufficiency in software production.

State Minister for Commerce Ahasanul Islam said, “Considering the country's ICT sector seriously, we have helped its expansion in the international market and will continue to support it in the future. Of course, the ICT sector of Bangladesh will one day become a big sector like the garment sector.”

“The IT sector has developed with the combined efforts of all and I hope that will continue. The commerce ministry has taken the initiative of becoming completely paperless. Within the next one year, the ministry will be completely paperless. In other words, if you have the necessary documents to open a company, you can get all the certificates sitting at home,” he said.

State Minister for Posts, Telecommunication and Information Technology Zunaid Ahmed Palak said, “The 2,500 ICT service providers and software development companies under the BASIS have created employment for around three lakh youths. We want to increase it to 10 lakh. The current government has established the IT sector of the country. We want to increase the export earnings of this sector to $5 billion by 2029.”

“Our IT sector is growing and so are the possibilities. We have requested the prime minister to provide tax exemption facility to the promising ICT sector for another 5 years,” he said, adding, “Now, in addition to software development, we have to be interested in making the youths skilled in things like startups, machine learning, block-chain, artificial intelligence and moving the country towards a technology-based economy.”

Speaking as the chief guest, Salman F Rahman gave a positive indication that the tax holiday facility for the ICT sector of the country will remain in force this year as well despite the IMF pressure on NBR to withdraw tax exemption.

He said, “I had an opportunity to talk to the prime minister about the issue of tax exemption. The prime minister assured to consider the proposal in view of the request to impose taxes consistently and rationally in different periods. During the presentation of the upcoming budget, it will be known how long the tax exemption would remain in place.”

Addressing the BASIS members, he said, “You have to be vocal about what kind of policy support is needed for the domestic ICT sector to keep pace with the continuously advancing global technology. While tax exemptions are important, what kind of policy do you need for the next level? AI, block chain, big data need to be looked at because programmers will lose jobs in the future. So, now they have to be trained to the next level. The government should be guided in this matter by BASIS.”

Mentionable, on May 8 last, the Executive Council Election for the 2024-2026 term of BASIS was held. Later, an 11-member executive council was formed.