Leaders in the information technology sector voiced their concerns on Sunday regarding certain aspects of the proposed budget for the fiscal year 2024-25.

They highlighted that the elimination of tax exemptions for cloud services and IT process outsourcing could impede the sector’s journey toward achieving self-reliance.

During a joint press conference held at the BASIS Auditorium in Dhaka, leaders from 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 called for policy support from the government to bolster self-reliance in the sector.

BASIS President Russell T Ahmed urged the government to maintain tax exemptions for cloud services and web hosting to bolster the growth of local ICT and service companies.

He also called for a reassessment of the proposed 1 percent import duty on capital equipment for investors in high-tech parks, advocating for the retention of the current duty-free status.

Russell expressed gratitude to Prime Minister Sheikh Hasina for extending tax exemptions for the ICT sector by three years.

BACCO President Wahid Sharif criticized the proposal to increase supplementary duty on mobile SIM card usage by 5 percent.

He also voiced concern over the removal of tax exemptions from sectors such as cloud services, IT process outsourcing, medical transcription, search engine optimization, system integration, and NTTN services, cautioning that such measures could have negative ramifications for the ICT industry.

ISPAB President Md Emdadul Hoque pointed out that despite directives from the Prime Minister to enhance the ICT service sector, the proposed budget failed to include all ISP services under the IT-enabled services category.

He highlighted challenges posed by a 10 percent advance income tax on broadband internet service providers and a 37 percent VAT and duty on optical network unit and optical line terminal equipment, stating that these measures could hinder the expansion of internet services and the transition from a digital Bangladesh to a smart Bangladesh.

Syeda Ambareen Reza, Vice President of E-CAB, emphasized the need to withdraw the existing VAT in the logistics sector to create a level playing field between online and conventional store products.

She demanded a minimum 2 percent cash incentive equivalent to payment charges to promote digital payments, arguing against the inclusion of payment gateway charges in the Non-Tax Deducted at Source list.