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The budget, which was announced on the 11th of June, is the largest yet in Bangladesh’s history with a set target of BDT 568,000 crore for the fiscal year 2020-2021.
The finance minister has proposed allotting BDT 4,561 crore (0.8%) for the Information and Communication Technology (ICT) and Posts and Telecommunications Division in the 2020-2021 fiscal year.
Of the total amount, BDT 1,415 crore was proposed to be allotted for the ICT Division which is BDT 223 crore (18%) more than the previous fiscal year. BDT 3,146 crore was proposed for the Posts and Telecommunications Division, from which BDT 1,138 crore is to be allotted to the Bangladesh Telecommunications Company Ltd.
The government has sought to extend tax holiday benefits to seven new sectors from the next fiscal year to encourage the expansion of manufacturing activities. Exemption from tax to be granted to the following newly established industrial undertakings set up within June 2024 –
With the addition of the above seven sectors, the total number of industrial sectors eligible to enjoy tax exemptions has increased to 33. This will enable domestic enterprises to grow. However, the usage of the facility should be monitored to avoid misuse.
Emphasizing the hi-tech park and software sector, seven hi-tech park development projects are getting priority in the forthcoming budget, despite the fall in allotment of money in the sector. Around BDT 445 crore has been proposed for these projects.
Author: Mehad ul Haque, Senior Business Consultant and Project Manager Ishtiak Mourshed, Business Analyst, LightCastle Partners Ltd.
As part of LightCastle’s budget analysis, we look into the direct and indirect impacts of this year’s budget on different sectors. While some of the sectors have received significant policy assistance, others have been cast aside in the government’s attempt to salvage additional revenues for financing the budget. The economic contribution and perceived importance of the sector were key considerations while deciding whether the sector will be eligible for policy support. In this write-up, we look into the immediate-term impacts of the budget on the ICT & Hardware Sector.
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