While the government is preparing its plans with the long-term goal of earning 45 billion foreign exchanges from the ICT sector, the International Monetary Fund (IMF), an autonomous financial institution approved by the United Nations, is about to block the path. The organization has advised not to extend the existing tax exemption period in 27 digital services of this sector at the end of the current financial year.
The IMF delegation made this suggestion in a day-long meeting with the officials of Income Tax, Customs and Customs Department at the Revenue Building in Agargaon on Sunday, April 28.
According to reliable sources present in the meeting, the matter of the letter sent by the State Minister for Information and Communication Technology Zunaid Ahmed Palak to NBR was discussed. The letter was intended to extend the tax holiday in this sector till 2030 on behalf of the sector concerned. According to the source of the letter, if the tax exemption is removed, the growing development of this sector will be hindered. But this potential development was not taken into account by the IMF. The NBR told the IMF officials that the decision will be taken on a holistic basis in such circumstances.
According to sources, apart from NBR Chairman, top officials of three departments and 6 representatives of IMF were present in the meeting. The IMF mission suggested in the meeting to withdraw all tax exemptions within the next three years.
In the meeting, NBR officials highlighted the overall picture and current status of the IT sector. They said that the tax exemption has led to the rise of this sector and it needs to continue in the context of Bangladesh. However, the IMF mission did not agree on this.
Sources also said that the issue of implementing 15 percent VAT against any service has come up in the discussion. The IMF has suggested removing apparel, footwear, LPG, mobile phones and other sectors from tax holidays. Besides, the IMF has asked to know whether it is possible to collect the due money from Petrobangla, additional revenue can be collected or not. Besides, the organization has talked about institutional reforms in three departments.
The IMF team will meet with various government departments until May 8.
On January 30, 2023, the IMF approved a loan of 4.7 billion US dollars. At that time, the organization gave various conditions including revenue increase, banking sector reform. It has already released more than $100 million in two installments. The third installment is due by the end of next month.