The software and ITES sectors in Bangladesh will lose their corporate tax exemption facility after June. Startups will have to pay a 0.6% turnover tax that will reduce the profits and demotivating investors. This could lead to job cuts and closures of many startups. The software industry is also facing similar threats.
urging for an increase in exemption until 2030. A roundtable session on Tax policy recommendations for promoting local tech startups” held today at The Daily Star Conference hall in the capital's Kawran Bazar.
Local techstartsups raised their demand at a roundtable. The Bangladesh Venture Capital and Private Equity Association (BVPEA), Bangladesh Association of Software and Information Services (BASIS), Institute of Informatics and Development (IID), and the EdTech Society jointly organized the roundtable discussion. And More than 20 number of startups entrepreneurs, the venture capital investors and different companies representative and tax experts were participated the roundtable and shared their opinion upon the issues.
The roundtable was moderated by Fahim Mashroor , Former President , BASIS . Where the keynote was delivered by Snehasish Barua , Partner at Snehasish Mahmud & Co.
The discussants shared that the other countries of the world including the neighboring countries like India, Singapore, and Egypt are supporting and offering the incentives to flourishing the startups where tax exemptions for long is one of the major support to mention. Our local startups were able to bring one billion USD as FDI. there are more than 2,500 startups in the country. About 1.5 million people have been directly and indirectly employed in the startup sector. So if the tax exemption will remove in coming june than it will impact negative in investment. Moreover business people will not interested to bring their money from abroad to Bangladesh , that consequence the reserve shortage.
Fahim Masroor said that – Asper the Nataional revenue board (NRB) the government is losing 1477 core taka revenue every year by offering this tax exemption . And they consider it as their subsidy. According to that it seems that the local IT/ITES companies are earning more than 5000 core per year. The real fact is far away from it. He said that the local industry earn maximum 1000 core per year as revenue and the government losing maximum 300 core taka as revenue from this sector. So there is a miss mess about the real data and the considering one. He requested to the NBR to do the survey among the companies and calculate the real revenue and support the industry to grow.
BASIS Former President Shamim Ahsan Said- We are just going to enjoy the benefits of the policy support that the government offered to grow the ICT sector now. So if the policy sopuurts like tax exemption stopped right now then we will miss all the profits that we invested and government supported rather to arise some new challenges for us. Taxation is a Basic Practice of Business so we don’t want the exemption for good . But need to continue the support till we will move in the next level of revenue. Otherwise we will lose our entrepreneurs and fail to attract the FDI. It will directly impact negative in our IT and ITES startups. Also impact is employment and revenues.
Besides them Samira Zuberi Himika, Senior President of BASIS, Saied Ahmed, Managing Director of IID, AR Communication Founder and CEO Asif Rahman, Bids Economy Limited Managing Director Jishan Kinghshuk Haque, Chaldal Dotcom Founder Zia Ashraf, Content Matters Limited CEO S.M. Rafiqul Islam Sana, Dreamers Lab Founder Tanveer Hossain Khan, SSD Tech Founder Firoz Mohammad Jahidur Rahman, and Shoikot Hossain, CEO of Bangladesh Venture Capital Limited, expressed their views at the discussion.
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