Local software VAT free, imported one to be costlier

The government is going to withdraw value-added tax (VAT) from locally developed software which is currently 5.5 percent, according to the proposed budget of fiscal 2017-18.

At the same time imported software will be much costlier than existing situation.

Finance minister AMA Muhith also proposed to increase supplementary duties on all kinds of database software and other computer software to 10 percent up from 5 percent.

Earlier, industry leaders requested the finance minister to withdraw VAT from locally developed software.

And as he did not mention anything about the imported software's import level valuated tax, it also means the imported software will face more taxes for importing, said experts.

Earlier, industry leaders requested the finance minister to withdraw locally vat from developed softeware.

"Through this decision in one way we withdraw tax from locally developed software and one the other hand they will get protection from the imported software," said AMA Muhith, the finance minister in his budget proposal.