Bangladesh Association of Software and Information Services (BASIS) has asked the government for halting its decision to increase VAT on ICT sector.
The organisation came up with the request after the interim government led by Dr Muhammad Yunus has moved to hike VAT rates by amending the Value Added Tax and Supplementary Duty (Amendment) Ordinance,2025.
In a letter to National Board of Revenue (NBR) Chairman Md. Abdur Rahman Khan, BASIS said the hike in VAT on internet and telephone services will hinder the growth of the ICT sector.
Terming the hike barrier to the country’s technological shift, the BASIS said telephone services now face a VAT rate of 23%, while internet services are subject to 10%.
It referred to over 300,000 young professionals, including 20% women, employed in the ICT sector and more than 600,000 freelancers reliant on internet services for their livelihoods.
Revised VAT rates are likely to affect key sectors like e-commerce, f-commerce, and mobile financial services, all of which are critical to the country’s digital economy, BASIS cautioned.
The association sees a challenge for small IT companies as the ordinance mandates VAT registration for businesses with an annual turnover exceeding Tk 500,000, replacing the previous threshold of Tk 30 million.
BASIS also said hike in VAT poses an undue burden on small and medium enterprises (SMEs).
