Fiscal budget poses challenge to Bangladesh’s IT-BPO growth
DHAKA, BANGLADESH — Key trade organizations for Bangladesh’s IT-Business Process Outsourcing (BPO) industry raised concerns about the fiscal budget for 2023-24, asserting that it undermines the nation’s vision for a ‘Smart Bangladesh.’
In a press conference, representatives from the Bangladesh Association of Software and Information Services (BASIS), Bangladesh Computer Samity (BCS), Bangladesh Association of Contact Center and Outsourcing (BACCO), Internet Service Provider Association of Bangladesh (ISPAB), and E-Commerce Association of Bangladesh (E-CAB) criticized the budget’s failure to consider the proposals aimed at fostering the domestic software industry and reducing the cost of IT-BPO services.
Although BASIS President Russell Ahmed described the budget as the largest ever — with an increased allocation for the ICT sector — he said there is no significant positive news for the industry.
He criticized the increase in import duty on operating systems, databases, and security software from 5% to 25%, alongside a proposed 5% VAT on software, stating that these measures contradict the Smart Bangladesh objective.
BCS representatives expressed disappointment with the persisting 26% total tariff on laptops, FMC printers, and toner cartridges imports.
Meanwhile, BACCO President Wahid Sharif highlighted the potential negative impacts on the BPO services market due to an increased cost of services resulting from high import duties and VAT on essential software.
The failure of the budget to extend the corporate tax exemption period for the industry from 2024 to at least 2030 further deepened the industry’s discontent.
As the budget stands, industry leaders argue that the ability of the IT-BPO industry to contribute effectively to the Smart Bangladesh vision is significantly compromised.
