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Priorities for IT sector

Habibullah N Karim
In this budget the IT industry is anxiously waiting to see some pro-active measures to save the sector from further stagnation. Both the domestic and export markets have literally taken a nose dive in the last two years. Export revenues have registered 4 percent and 34 percent drops in the last two years according to the latest figures from EPB. Needless to say that a thriving IT sector is a sine qua non for the economic development of the country in the 21st century. To reverse this alarming
trend the government needs to give the market the right cues for bringing growth back through appropriate financial incentives and facilitation measures. Let me take you through some of these:
Income-tax exemption: This facility for software companies ends this year. The raison detre for this was that regional countries are years ahead of us with sizable portions of the US$300 billion IT offshoring market, the software and IT enabled service entrepreneurs here need all the investments they can muster to try to take a piece of
the action of the increasingly competitive market. This exemption facility should continue for at least the next ten years.
Accelerated depreciation on procurements of computer hardware, software and services: This was agreed to by the finance ministry in 2002 but was never implemented. Private companies carry a double burden at present in their books of accounts for frequent upgrades to their computer systems especially software and services. It is an accepted fact that better automated companies arc better
tax payers and so it's in the interest of the government to encourage automation of business operations through use of computerized business solutions. Allowing accelerated depreciation at 50 percent per annum or more on such procurements will remove the double burden. We are the only major country in the world without this facility-
Allocations for development of a software technology park (STP) and aggressive export marketing: To attain a visible foothold in the global IT offshoring market we need
to attract a few of the top software giants of the world to Bangladesh for their offshore development centres (ODC). This will help build an image of Bangladesh as an IT offshoring destination and secure for Bangladeshi entrepreneurs a stepping stone to launch their global marketing. To that end appropriate budget allocations are needed to set up a STP in Mohakhali and send software delegations to outsourcing exhibitions throughout the world.
Internet service as a public service obligation (PSO):
Internet is not a luxury or for businesses only. Today it is the most important medium for governance, business, education and social interaction. Accordingly the government needs to make internet available to all citizens at cost (noprofit basis) if not at a subsidy to leapfrog other developing nations in this regard
The writer is the president of Bangladesh Association of Software & Information Services (BASIS) and the chairman of the IT committee of the American Chamber of Commerce m Bangladesh. He can be reached at president@basis org M