Govt in a fix to finalise tax waiver facility for tech parks

Dhaka,  Monday,   2016-10-17
Published : 17 Oct 2016, 21:21:30

Govt in a fix to finalise tax waiver facility for tech parks

Developers fear scaring away investors
Mehdi Musharraf Bhuiyan

The government is in a dilemma over the nature of tax holiday schemes for hi-tech park facilities, which insiders say could dampen interest of investors to invest.   

Officials of the Hi-Tech Park Authority said any information technology company investing in such zones will get a 10-year tax exemption facility from the date of their commercial operation.

However, according to the relevant Statutory Regulatory Orders (SROs) issued by the National Board of Revenue, IT companies investing in technology parks will get 100 per cent tax exemption only for the first three years of their operations.

The SROs also say that starting from the fourth year, business units working in technology parks will get 80 per cent tax exemption, which will come down to 20 per cent by the tenth year through a 10 per cent reduction in tax exemption each year.

Such regulatory orders are creating some confusion, insiders noted, as the information technology companies in Bangladesh are already eligible for tax exemption facilities until 2024.

 "It is as if a company investing in hi-tech parks will get only three years of full tax exemption, while the IT companies, if they are located somewhere else, will be eligible for longer tax exemption", said Azad Choiwdhury, Director of Bangladesh Technosity Limited.

Technosity, which is a Bangladesh-Malaysia joint-venture company, is a subsidiary of Fiber@Home and is one of the two entities responsible for the development of various blocks at Kaliakoir hi-tech park in Gazipur.  

"IT companies will not be interested in investing in hi-tech parks if they do not get some additional tax incentives and such incentives need to be reflected in relevant SROs," Mr Chowdhury added.

Such concern was also echoed by other developers and prospective investors of the hi-tech parks who called for better alignment of ICT tax incentives.

"It is difficult to convince investors to come to hi-tech park if issues related to fiscal incentives are not resolved," said Abu Reza Khan, Managing Director of Summit Technopolis.

Summit Technopolis, which is a joint venture between the local Summit Group and Infinity Infotech Parks of India, is responsible for the development of block 2 and 5 at Kaliakoir.        

Mr. Khan said that his company has already been successful in attracting a Sri Lankan company called Ewis Tech Manufacturing for setting up a desktop, Laptop and Tablet Manufacturing unit at Kaliakoir, while it is also in discussion with ten local investors to come to the park.

Authority officials said that they are in talks with the National Board of Revenue to resolve the issue.

"The issue has drawn our attention. We have held several rounds of talks with the NBR Chairman and other officials on the matter," said Syed Amdadul Huq, Director of the authority.

HTPA officials also said that developer entities should expedite their construction work to attract investors at Kaliakoir.

Once completed, the park is expected to be local version of Silicon Valley hosting IT companies, Business Process Outsourcing companies, telecommunication, and automobile and renewable energy entities from home and abroad.  

Apart from Kaliakoir, the government has also allocated Janata Tower in the capital as a software technology park, while also planning to construct IT villages across the country including an IT Village at Mahakhali, Electronic City in Sylhet and Barendra Silicon City in Rajshhahi.   
Editor : A.H.M Moazzem Hossain
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