BASIS proposes 10% tax for ISPs

The Bangladesh Association of Software and Information Services (BASIS) on Sunday requested that Internet Service Providers (ISPs) be classified as Information Technology Enabled Services (ITES) and that their corporate taxes be reduced to 10 per cent.

ISP companies are currently required to pay 30 per cent in corporate taxes.

The association made the demand at a pre-budget meeting of the Fiscal Year 2022-2023 with the National Board of Revenue (NBR) at the NBR conference room on the day.

NBR Chairman Abu Hena Md. Rahmatul Muneem presided over the meeting while BASIS Executive Director Issa Mainuddin presented the budget proposal on behalf of BASIS.

The BASIS executive director urged that three-year tax exemption certificates be issued and that the procedure for delivering those certificates be digitalized, claiming that IT companies have to wait longer to obtain certificates under the current system.

Speaking at the event, the official said: “To meet the government’s target of generating $5 billion through ICT exports, the tax exemption on the earnings of information technology and information technology enabled services (ITES) enterprises must be extended until 2030, which has since been extended until June 30, 2024.”

Issa Mainuddin also recommended including certain new services in the definition of ITES, such as software services, IT/ITES training, and internet services.

He advocated that a provision be drafted to provide software and IT services professionals with a special income tax exemption.

In order to stimulate digital payments, BASIS advocated that NBR provide stimulus in every digital transaction.

In response, the head of the NBR promised to grant tax exemption certificates for at least three years at a time, rather than just one.

BASIS also pushed for local software and IT companies to be excluded from any Value Added Tax (VAT) and Source Tax.

In his proposal Issa Mainuddin demanded the scrapping of taxes on cyber security software from the fiscal year 2022-23; raising a fund of around Tk300 crores for lending to women at 2 per cent to encourage women’s participation in the ICT sector, and a budget allocation of Tk500 crore for technical assistance projects in the least developed countries where Bangladesh performed UN missions.