Software, start-up ventures to face setback unless tax exemptions extended

Published : 25 Apr 2024 09:14 PM

Country’s software and start-up sector insiders at a roundtable discussion opine that as the tax exemption facility in ICT sector ends in June this year, the survival of country’s software and newly developed start-up initiatives will face threat unless the National Board of Revenue does not extend the exemption period.

They said this will also affect the implementation of ‘Smart Bangladesh’ vision announced by the government.

The roundtable discussion on "Tech Startups: Income Tax Policy Support" was held at Daily Star Auditorium on Wednesday.

20 emerging start up entrepreneurs of the country, representatives of several organizations investing in the startup sector, tax experts and leaders of BASIS spoke at the event.

Speakers said that many incentives are being offered to entrepreneurs to encourage new startup investment in the technology sector in our neighbouring countries. Long-term tax exemptions are the most effective of such incentives.

Our country has also received nearly $1 billion in foreign investment in the technology startup sector in the last 5 years. If the exemption is removed after June this year, then on the one hand, investment will decrease, on the other hand, there will be a fear that a lot of software export money will not come to the country, which will put more pressure on the country's dollar reserves.

Fahim Mashroor, the former president of BASIS, the main organizer of the program, said that according to the calculations of the National Board of Revenue, the government is losing about Tk 1,470 crore in revenue every year due to tax exemptions in the ICT sector.

As such, companies in this sector are making a profit of 5 thousand crore rupees annually. He said that this account does not in any way reflect the real picture.

At present, more than 5000 small entrepreneurs of software and information technology services make a maximum profit of Tk 1,000 crore annually, out of which the government will get a maximum of Tk 300 crore if tax exemption benefits are removed.

He urged the Board of Revenue to conduct a company-level survey to determine the true profitability of the sector.

Shamim Ahsan, former president of BASIS, said on the occasion that the benefits of the policy support that the government is already providing to the IT sector have just started to come. 

Samira Zuberi Himika, Senior Vice President of BASIS, Shaukat Hossain, Director of Venture Capital Association, Sayed Ahmed, Head of Policy Research Institute (I-I-D) also spoke on the occasion. The keynote was presented by Snehashish Barua, a startup business and tax expert.