NEWSPAPER reports said that the National Board of Revenue (NBR) has slapped 4 percent Value Added Tax (VAT) on computer and computer accessories to be paid by the users at the end. The revenue administrator in a letter asked computer sellers at major city markets to pay the VAT on the sale proceeds of computers making clear once again the Finance Minister’s mounting pressure to open new sources of revenue to arrange money to buttress the bureaucracy to remain friendly to the government. The Finance Minister appears desperate, no matter the new move is antagonistic to the government’s “Digital Bangladesh” vision which is being supervised by the Prime Minister’s ICT adviser who happened to be her son. The successive governments since 1998-99 were allowing import of computer and computer accessories tax free to spread the use of computer and internet to take the country’s computer literacy slowly at global standard. The present government has declared it as the thrust sector but the Finance Minister’s latest move appears to be highly disturbing to its growth. Using the facilities, young people in Bangladesh have been earning handsome from outsourcing window in the global marketplaces and e-commerce sites were also booming in the last several years. Bangladesh is ranked seventh among 186 countries in terms of earnings through freelancing with around 5.5 lakh Bangladeshi freelancers registered with different freelance marketplaces. They are engaged in self-employment with IT knowledge and access to internet world. More and more Bangladeshi nationals are now turning to freelance route earning livelihood for families. Bangladesh private sector aims at exporting $1.0 billion worth of software products and services to the international market this year. Traders said VAT at 4 percent on computer would cut the buyers pockets deeply discouraging sales at higher prices based on higher import duty. It means a booming sector would ultimately slow down being target of generating revenue for the government. The VAT on computers, laptops and such other accessories will discourage the educational institutions and the young people to buy new products and refurbish the existing stocks to accelerate computer based learning and achieving skills for domestic and international market. In our view the Finance Minister must think of the impact of his highly aggressive revenue policy on business cost, market prices and at productivity level. Particularly the VAT on computer will definitely slow down the development of the ICT sector which seems to be highly counter-productive to the government’s own policy of Digitalization of Bangladesh. The Finance Minister said he is under tremendous pressure to provide huge fund to meet government demands. But he should also think that there is a private sector and ordinary people outside the government and they also deserve to be protected. We suggest that VAT on computer must be reviewed to keep the development of the sector unimpeded.
