According to the National Information Technology Policy, the tax and value-added tax exemptions for the software and ITES sectors end on June 30th of this year. Business entities related to this sector are concerned about this issue. Because if this tax and VAT exemption is not extended, the cost of product and service production will increase, affecting profit margins. Long-term investment enthusiasm among entrepreneurs will diminish. The impact will also be felt in the creation of employment opportunities in the information technology sector.

The software and ITES sectors are considered potential sectors for earning foreign currency after the ready-made garment industry in the country. The government is also considering these sectors as a priority. The current revenue from software and ITES accounts for nearly $1.9 billion. Among the services under ITES, the BPO sector is growing with success in the global market. Additionally, efforts are underway to encourage foreign investment in the country's e-commerce sector. Together, the contribution of the information technology sector to the country's economy is increasing.

Due to several initiatives by the government, Bangladesh has emerged as a reliable exporter in the global market. Currently, there are around 6.5 lakh freelancers in the country, and approximately 10 million people are employed in other IT sectors. Freelancers are earning around $500 million annually through online outsourcing. In the past decade, there has been significant investment in Bangladesh's IT and ITES sectors, starting with startups, with investments exceeding $850 million. Until 2024, the tax and value-added tax exemption for the information technology sector will be the main catalyst. Many believe that the business-friendly policies of the government and continued support are necessary to maintain this exemption. The tax and value-added tax exemption are considered crucial, and maintaining them until 2031 will continue the progressive development of related industrial sectors.

Moreover, considering the government's goal to make Bangladesh a high-middle-income country by 2031, the expansion of revenue sources through multi-dimensional diversification is imperative. Undoubtedly, the information technology and service sectors are considered one of the most important value-added sectors domestically. These sectors also hold potential for substantial contributions to Smart Bangladesh initiatives. From the fiscal year 2024–2025 onwards, there is no alternative to extending the timeframe for this exemption to attract young entrepreneurs and investors to contribute to the construction of Smart Bangladesh.

On March 10th of this year, the top five organizations in the information technology sector (BASIS, BCS, ISPAB, BACCO, and ECAB) jointly submitted a written application to the honorable Minister of Finance Ministry, demanding the extension of the tax and value-added tax exemption for the software and ITES sectors until 2031 as per the National Information Technology Policy. So far, these organizations have not heard any reassuring statements regarding the issue.

According to BACCO President Wahid Sharif, they have communicated with different relevant ministries of the government to request and resolve the issue. He stated that they have submitted the request but have not received any significant response yet. The month is passing, and June is approaching. The budget is also on the way. Therefore, we are worried and concerned about this issue. In this regard, we desire the government to take sincere initiative and support the continuous growth of the local ICT industry.

 


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