Tax hike to slow e-commerce growth: BASIS

Staff Correspondent

6 June, 2021 12:00 AM printer

Entrepreneurs call for review of the proposed tax increase on e-commerce, MFS sector

Tech sector leaders said increasing tax net on e-commerce and mobile financial services (MFS) will send a negative signal to the investors.

They urged the government to review the decisions in the proposed budget placed for the FY2021-22.

Bangladesh’s e-commerce and MFS have witnessed a significant growth in recent time, especially during the pandemic when the users largely avoided visiting shops and banks physically.

Finance Minister AHM Mustafa Kamal proposed to define the e-commerce platforms as source tax deducting authority and also proposed to increase corporate tax to 40 percent from 32.5 percent on the MFS providers.

Speaking at a post-budget reaction on Saturday, Bangladesh Association of Software and Information Services (BASIS) said the source tax on e-commerce will bar the growth in the sector which made a significant contribution to the economy during the pandemic.

BASIS President Syed Almas Kabir welcomed the inclusion of nine new services in information technology-enabled services which are under a tax exemption facility until 2024.

He also requested the government to bring internet services and some specific hardware devices produced locally under the tax exemption facility, helping the sector grow smoothly.

The software entrepreneurs said the government organisation or the software industry is not getting the benefit as the CPTU is yet to finalise specialized RFP (request for proposal) document on the service since its beginning in August 2018.

“We request that the RFP document specialized in the purchase of software, including the revision proposals of BASIS and the ICT Division, be expedited in implementing the budget guideline,” Syed Almas Kabir said.

BASIS senior vice president Farhana A Rahman said the budget has no mention about assistance to the women entrepreneurs in technology sector.

 “An amount ot Tk 950 billion has been allocated for education and technology. However, it is not clear how much of this is allocated to the tech sector,” she said.

“There is no specific guideline in the budget on creation of a local technology market for private software companies during the pandemic. There is no mention also about the digitization of the government,” Farhana Rahman said.

BASIS vice presidents Shoeb Ahmed Masud and Mushfiqur Rahman and directors Tamzid Siddiq Spondon and Rashad Kabir were also present at the meeting.