BASIS Pushes Tax Simplification and Digital Reform Drive for ICT Sector Growth
The Bangladesh Association of Software and Information Services (BASIS) has submitted a 10-point set of proposals emphasizing tax simplification, increased incentives, and accelerated digital transformation of government services to boost the growth of the country’s software and information technology sector.
On 26 April, Sunday, during the pre-budget consultation with the National Board of Revenue (NBR) for the upcoming 2026–27 fiscal year, the proposals were presented on behalf of BASIS by Mushfiqur Rahman, member of the BASIS Advisory Committee and Managing Director of Spectrum Software and Consulting Private Limited. Research Assistant Md. Zulfikar Haider of the BASIS Research and Development Division was also present.
During the meeting, the proposals were presented before NBR Chairman Md. Abdur Rahman Khan and Executive Chairman of the Bangladesh Investment Development Authority (BIDA) Ashik Chowdhury.
In its proposals, BASIS stated that under HS Code 85234921, the total tax burden on software including operating systems, databases, and development tools currently stands at 42.88 percent, which is a major barrier to the growth of the domestic software industry. It therefore proposed reducing duties on imported software used in local software production to a tolerable level, while recommending that existing duties on software that can be produced domestically should be maintained.
To ensure transparency, the organization proposed making it mandatory to mention the “Country of Origin” in foreign software procurement and verifying import duty payment details in VAT-tax returns through Chartered Accountants or Cost and Management Accountants.
The proposal also called for extending the existing tax exemption facility for the software and IT-enabled services (ITES) sector until 2031. In addition, it recommended increasing the current 6 percent cash incentive on software exports to 10 percent to further boost foreign currency earnings.
BASIS proposed that software repair and maintenance services should be clearly classified under ITES, with a 5 percent VAT rate applied, and that tax exemption under income tax law along with exemption from withholding tax should be clearly defined.
The organization also highlighted that large institutions and government agencies often deduct VAT and income tax at source but fail to provide invoice copies within the stipulated time, creating complications for companies. It therefore proposed making it mandatory to provide invoice copies within 15 days.
Although software firms are treated as consultants under the Public Procurement Rules (PPR), BASIS noted that due to tax exemption benefits, withholding tax is not applicable for such services, and sought clarification on this issue.
For strengthening digital revenue management, BASIS proposed making certified POS software mandatory for all VAT-collecting entities and integrating them with a real-time VAT system. It also recommended applying the same condition to merchant account services provided by banks and mobile financial service providers.
Emphasizing digital transformation of government services, BASIS stated that all citizen and business services should be made online-based and private sector participation should be increased under a managed service model. It called for a separate allocation in the budget and directives to ensure implementation within a defined timeframe. It also proposed launching a public dashboard to ensure online bill payment processing and timely settlement.
In addition, it recommended creating a centralized database and enforcing mandatory online collection and expenditure systems for government revenue streams such as land services, market leases, trade licenses, and tolls.
Speaking at the meeting, BASIS Advisory Committee member Mushfiqur Rahman said that if the proposals are implemented, the country’s software industry will become more competitive, export earnings will increase, and new momentum will be created in achieving the goals of Digital Bangladesh.
DBTech/IH/EK/OR
