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BASIS blasts budgetary proposal to hike duty on mobile SIM card

Published : Monday, 10 June, 2024 at 12:00 AM  Count : 284
Business Correspondent
Information technology sector (ICT) business leaders criticized the budgetary proposal to increase supplementary duty on mobile SIM card usage by 5% and urged not to bring cloud service and web hosting under taxation.

However, addressing a pre-budget press conference they expressed gratitude to the Prime Minister Sheikh Hasina for extending the tax exemption for the sector for three more years in the proposed budget for the Financial Year 2024-25.

The Bangladesh Association of Software and Information Services (BASIS), Bangladesh Association of Contact Center and Outsourcing (BACCO), Internet Service Provider Association of Bangladesh (ISPAB) and E-Commerce Association of Bangladesh (E-CAB) have jointly organized the press conference at BASIS Auditorium in Dhaka on Sunday.

BASIS President Russell T. Ahmed, BACCO President Wahid Sharif, ISPAB President Md Emdadul Hoque and E-CAB Vice President Syeda Ambareen Reza gave their budget reaction on behalf of their respective associations and answered various budget related questions from the media representatives.

BASIS President Russell T. Ahmed thanking Prime Minister Sheikh Hasina said: "This tax exemption will not only contribute to the development of the ICT sector but also play a crucial role in building Smart Bangladesh, impacting various fields such as education, healthcare, agriculture, banking, and export-oriented manufacturing. This is closely linked with the Fourth Industrial Revolution and will spur technological development and innovation across multiple sectors of a knowledge-based, cashless economy."

BASIS President also pointed out that currently, only 10% of the $20 million cloud service and web hosting market is held by local entrepreneurs. He warned that bringing these services under taxation could discourage domestic entrepreneurs.

BACCO President Wahid Sharif highlighted that the tax exemption in the ICT sector would significantly contribute to technological advancement, innovation, and the creation of new entrepreneurs.

He noted its positive impact on various export-oriented industries, education, healthcare, and banking, which would lead to job creation and substantial foreign currency earnings, thereby boosting the economy.
 
He criticized the proposal to increase supplementary duty on mobile SIM card usage by 5%, which would raise the cost of mobile internet services. He stressed that expanding mobile internet and rural internet services is crucial for achieving Smart Bangladesh.

ISPAB President Md Emdadul Hoque expressed concerns regarding the proposed budget for the fiscal year 2024-25. Despite directives from the Prime Minister to enhance the ICT service sector, the failure to include all ISP services under the IT-enabled services (ITES) category, coupled with a 10% advance income tax (AIT) on broadband internet service providers and a 37% VAT and duty on ONU and OLT equipment, poses significant challenges.

ISPAB believes these measures will hinder the expansion of internet services and the transition from Digital Bangladesh to Smart Bangladesh.
 
In a statement, ISPAB vehemently protested these regressive measures. The association called for the inclusion of all ISP services under ITES in the revised FY 2024-25 budget to ensure optimal internet usage and remove existing barriers.

Additionally, ISPAB demanded the withdrawal of the 10% AIT on broadband providers, the 37% VAT and duty on ONU and OLT equipment, and all duties on ICT-related materials.



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