23 May 2024

Call for extending tax holiday for tech till 2041

Mazharul Islam Mitchel

Published: 16:30, 6 May 2024

Update: 16:31, 6 May 2024

Call for extending tax holiday for tech till 2041

A group of tech entrepreneurs have urged the government for facilitating tech business with tax-holiday for next 17 years to realise ‘Smart Bangladesh’ vision. “Tax exemption should be ensured until 2041 in order to save the artisans and the emerging information technology sector of building Smart Bangladesh,” Mustafa Rafiqul Islam Duke, Team Leader of Team Success at BASIS election, told a view-exchange meeting on Sunday.
Bangladesh Association of Software and Information Services (BASIS) is scheduled to hold the executive committee election on May 8. Team Success is contesting in the trade body election among three panels.
BASIS former president Mr. Syed Almas Kabir was also present at the meeting at Sheraton Dhaka. Addressing the program, Mustafa Rafiqul Islam Duke termed information technology the ‘most powerful’ tool to enable the ‘Smart Bangladesh’ vision. The government's 13-year tax exemption for these digital services is set to expire on June 30 as per the prescription of the IMF.
“The technology sector has been kept in the dark about policymaking. However, I myself have spoken to senior officials of the IMF and learned that they have not directly given any opinion on the tax holiday in the technology sector as such. We want to hold a round-table with IMF and government soon to clarify the issue,” he said.
The annual turnover of global tech businesses will be in the top 5 trillion dollars by the end of this year, with 6.8 percent growth year-on-year, according to Gartner's forecast.
“If we stop patronizing the technology sector at this stage, we will lag behind in the international race. The technology sector can be the next golden egg for Bangladesh. If the tax exemption is stopped, the government will get only four to five billion taka as revenue, and this decision may sabotage the enter technology golden goose era. If the golden goose of the technology sector dies at a nascent stage, the next promising sector of this country will die as well,” added Duke.
Referring to the rise of the garment industry, the Team Success leader said that the RMG sector is now providing results of policy support given forty years back.
“The technology sector can create employment for around 2.5 million people in the next seventeen years if the government provides a tax holiday. The annual turnover for salary in the technology sector will be Taka 1.2 trillion per year with an average 50 thousand monthly salary of 2 million people. NBR then can collect 25 percent income tax from these knowledge workers, the quantum can be in tune of Tk 30,000 crore from the Technology sector”, he added. 
Mustafa Rafiqul Islam Duke believes the technology sector can be another example of RMG to fetch more foreign currencies in the next decade if the entrepreneurs get policy support.