Budget is inconsistent with Smart Bangladesh objective: Tech Business Leaders

The budget for the fiscal year 2023-24 announced by the government did not reflect the recommendations or proposals of the information and communication technology sector as expected. Rather, it is inconsistent with the purpose of Smart Bangladesh. The business leaders of the national trade organizations of the information technology sector opined so in a press conference on budget response.  

The press conference was held under the joint initiative of The Bangladesh Association of Software and Information Services (BASIS), Bangladesh Computer Samity (BCS), Bangladesh Association of Contact Centers and Outsourcing (BACCO), Internet Service Providers Association of Bangladesh (ISPAB) and e-Commerce Association of Bangladesh e-CAB. The press conference held at BASIS Auditorium at Kauranbazar on Sunday.

BASIS President Russell T Ahmed, BACCO President Waheed Sharif, ISPAB President Md. Imdadul Hoque and e-CAB Vice President Mohammad Sahab Uddin were present on behalf of their respective associations and answered various budget related questions from the media representatives.   

BASIS President Russell T Ahmed said in his speech that the government has announced a budget of about 7 lakh 62 thousand crore taka. Which is undoubtedly the biggest budget ever. As every time, the budget allocation for the IT sector has increased in this year's budget. But in reality there is no positive or significant good news for the IT industry especially for the businessmen. After making specific and logical proposals, extending the period of corporate tax exemption for this sector till 2030, withdrawing VAT on software and ITES, increasing cash assistance from 10% to 20% against software and IT services exports and above all making software buyers special for the development of domestic software industry. I proposed to provide incentives. But none of these were taken into account. On the other hand, the operating system, Import duty on database and security software has been increased to 5%-25% and 5% VAT on software has been proposed. Which is in no way compatible with the Smart Bangladesh goal. Smart Bangladesh means that every sector will be smart. Where education sector, health sector, agriculture sector, energy sector, all sectors will be smart. But increasing the import duty and imposing VAT on software will increase the price of this software. Which is inconsistent with the objective of implementing Smart Bangladesh. Energy sector like this all sectors will be smart. But increasing the import duty and imposing VAT on software will increase the price of this software. Which is inconsistent with the objective of implementing Smart Bangladesh. Energy sector like this all sectors will be smart. But increasing the import duty and VAT on software will increase the price of this software. Which is inconsistent with the objective of implementing Smart Bangladesh.  

BSS DGM Md. Hasanuzzaman said in a written statement on behalf of the organization in a press conference as a representative of BCS president Subrata Sarkar; He said, "We are completely disappointed. The current total tariff is 26% as a result of imposition of 15% duty on imports of laptops, FMC printers and toner cartridges in the last financial year 2022-23, which were proposed to be withdrawn this year, but remain the same. Not a bit has changed. This will completely undermine the determination to build a smart Bangladesh.”

BACCO president Waheed Sharif said, international buyers get BPO services from Bangladesh at a relatively lower price, so Bangladesh is currently in an important position in the international information technology industry market, many contact center software is not yet being developed in the country, which has to be imported from outside the country, but the operating system , Database – Import of security software and other software is subject to 25 per cent import duty along with 15 per cent VAT. As a result, we believe that the cost of services in this industry will increase and will have a negative impact on the international market.

Eventually, the corporate tax exemption, the industry has grown from just 300 people to more than 70,000 people today. In the budget proposal, the request to extend the period of corporate tax exemption for this industry from 2024 to at least 2030 was not taken into consideration. As a result, the price of BPO services will increase in the future, customer attraction will decrease, new investment will be hindered and overall the development of BPO industry will be hindered.

ISPAB President Md. Imdadul Hoque said, "Internet Service Providers Association of Bangladesh (ISPAB) has been working for 25 years with the aim of building digital Bangladesh. In spite of the directives of the Hon'ble Prime Minister in the proposed budget for the fiscal year 2023-24, not including all services of ISPs in ITES, not reducing the duty on materials used in the IT sector and not withdrawing the 10 percent advance tax on broadband internet service providers, The ISP Association feels that the expansion of Internet services and the creation of Smart Bangladesh from Digital Bangladesh will be hindered. On behalf of ISP Association of Bangladesh, I am expressing a strong reaction against such a retrograde decision. At the same time, through this press conference, we strongly request the Hon'ble Finance Minister and NBR Chairman to take the ISP sector forward through inclusion of ITES in all the services of the ISP organizations to ensure the best use of the Internet and to remove the obstacles.

The e-CAB Vice President Mohammad Sahab Uddin thanked the Prime Minister for recognizing the e-commerce market place. He said, “This achievement is the effort of e-CAB for the last three to four years. This time the definition of the market place in the budget is the effort of e-cab in the last three to four years. Only e-cab has been meeting with NBR for the last few years for this definition alone. When this issue of VAT came to e-commerce, NBR also did not know what is the definition of market place. We had to wait three-four years to fix that divination. Digital businesses will benefit from VAT as a result of this integration. Logistics companies will benefit. Everyone can stand from a place of clarity. This sector will move forward in a more organized manner.”