ICT sector demands withdrawal of VAT on internet

May 25, 2014

The country’s information, technology and software business-related associations on Saturday demanded withdrawal of value added tax on internet to reduce the end-user-level cost. They placed the demand at a pre-budget discussion organised the Bangladesh Association of Software and Information Services, Bangladesh Computer Samity and the Internet Service Providers Association Bangladesh at Ruposhi Bangla Hotel in the capital.
‘If the government withdraws the 15-per cent VAT on end-users of the internet, then common people will be benefited. It will also increase the use of internet which will speed up the development and the economy,’ ISPAB president Aktaruzzaman Monju said at the meeting.
ISPAB joint general secretary Syed Tariqul Islam said the government should also reinstate full rebate on 15-per cent VAT on the price of bandwidth which the internet service providers bought from IIG operators.
‘There was 100 per cent rebate on this but the government in the running financial year reduced the rebate to 80 per cent. After that the revenue board declined to provide rebate more than 60 per cent. So, I request the government to reinstate the full rebate,’ he said.
BASIS senior vice-president Syed Almas Kabir said the government should extend the income tax exemption on the ICT sector until 2025 so that the sector could grow to maturity.
‘The goods and services exchanged under e-commerce should also get the VAT exemption,’ he said.
Immediate-past president of BASIS Fahim Mashroor said the government should withdraw the suspension on VAT automation.
‘The government introduced the VAT automation to ensure transparency but pressure from vested interest group took the move to suspension. The government should withdraw the suspension for increasing revenue and help IT sector too,’ he said.
BCS president Mahfuzual Arif said hardware industry needed more support as it was related to import of the goods and materials of the IT sector.
‘We need special facility in the port for hassle-free import of the goods,’ he said.
He also said the government should make a Tk 5,000-crore fund to support the industry from where the industry could borrow at a rate of 8 per cent.
State-minister for ICT Junaid Ahmed Palak said the government was committed to make a digital Bangladesh.
‘I strongly agree with most your proposals, specially reducing the VAT on internet. I surely will convey your demand to the finance minister,’ he said.

-With New Age input

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