BCS for withdrawing VAT on laptop imports

Bangladesh Computer Samity (BCS) urged the National Board of Revenue (NBR) to withdraw a 15 per cent VAT on laptop imports in the upcoming fiscal year 2023-24 (FY24) to save the computer industry from the impacts of the ongoing economic crisis and rising dollar price.

“The NBR imposed VAT on laptop imports in FY23 to encourage local production. But there has been no such fresh initiative in the country to this end. Even the international brands show lacklustre response in investing in local production for sensible reasons,” BCS President Subrata Sarkar said in a budget proposal sent to the revenue board.

According to the budget proposal, the imposed VAT is actually hindering business.

Subrata said, “The 15 per cent VAT imposed on laptop imports and around 25 per cent rise in dollar price has led to an increase in laptop prices in the country.

“Due to such crises, some businesses are trading low quality laptops in the markets which are causing revenue loss for the government while the buyers are being ripped off with low quality products.”

In the letter to the NBR, the BCS president said the cost of the computer at the consumer end does not reduce, because the VAT authority deducts 7.5 per cent VAT at source as there is no exemption at service stage. The traders currently enjoy exemption at imports, production and trading stage.

To get the exemption facility, BCS demands to withdraw VAT on computer and computer parts at service stage.

Besides, BCS proposed a reduction of advance income tax (AIT) by two to three per cent from the existing five per cent on every ICT product to reduce cost in supplying computer goods.

The organisation also demanded withdrawal of source tax in cases of computer goods supply.

Moreover, they demanded that authorities fix VAT at five per cent on OLT, ONU, ONT, Access Point – essential networking instruments – imports to ensure standard internet service at the consumer level. Currently, there is 58 per cent duty on imports, according to the letter.

“An imposing duty on such networking instruments import is a key barrier to ensure internet services at the consumer end,” it reads.

BCS also urged to reduce duty on networking cable from the existing 58.60 per cent, saying that due to the high duty, the cost of office digitalisation is increasing which is an obstacle to make Bangladesh digital.

The association said the exemption facility is required for those who are recognised by the BCS as ITES service provider.

“Despite having such provision under the law, the service providers have to renew ITES exemption certificate from the NBR every year, which is arduous and time consuming,” it said.