The proposed budget for the fiscal year 2023-24 in Bangladesh has raised concerns within the technology industry as it includes measures that could increase the cost of importing IT hardware and software. Industry insiders warn that higher import duties and the introduction of an additional VAT levy will result in increased expenses for hardware and software, reducing protection and incentives for local software development. The proposed budget prioritizes making imported hardware more expensive before sufficient local capacity is built, which could hinder industry growth. The increase in duties will affect computer hardware, including monitors, hard disk drives, pen drives, and routers. Additionally, import duties on foundation software like operating systems, database software, and development tools will rise. The software industry will also face a new VAT, reducing protection and incentives for local software. These changes could hamper the growth of the IT industry, which is currently the third-largest export sector in Bangladesh. The industry had requested tax waiver extensions, but the absence of such announcements in the proposed budget has caused confusion and suppressed investor confidence.
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