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Under the sandbox advantages, the minimum tax rate will be reduced from 0.6 percent to 0.1 percent in the next budget
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Sarwar Kamal, the founder of a new startup named Chardike Limited, said,
“Such facilities will be very encouraging for new startups like us.”
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Bangladeshi startups have raised roughly $400 million in international investment and created 1.5 million jobs over the last decade
The government will announce a “startup sandbox” for budding businesses to assist them to rise to prominence while utilizing their full potential. According to the Ministry of Finance authorities, startups would have no reporting obligation provided they grant permanent access to their system or records to the National Board of Revenue.
Bangladesh Government Set to Announce “Startup Sandbox” Targeted at New Entrepreneurs
Under the sandbox advantages, the minimum tax rate will be reduced from 0.6 percent to 0.1 percent in the next budget. Furthermore, they will be permitted to carry forward their losses for up to nine consecutive assessment years. At the moment, all businesses can modify their losses for up to six years.
According to the sources, entrepreneurs will also be granted amnesty from fines if they fail to comply with tax standards in order to accelerate their growth. Business leaders applauded the initiative, saying that such facilities will encourage more entrepreneurs to enter the startup industry.
According to the new budget proposals:
- Startups must be incorporated under the Companies Act of 1994 and work toward the deployment or commercialization of new products, processes, or services driven by innovation, development, technology, or intellectual property to be eligible for the facilities.
- A startup must be registered with the NBR in order to profit from a sandbox.
- A startup should not be a subsidiary of another firm that owns 50% or more of its stock. It also cannot be the consequence of an amalgamation or demerger program.
- It must be formed after the fiscal year 2017-18 but must be registered before the deadline of June 20, 2023. A startup venture’s growth year will be determined over the course of five years.
Startups can provide value by providing unique solutions or significantly improving on existing answers to any important problem or combination of problems. A startup, according to the budget recommendations, is a freshly registered firm with annual revenue of less than Tk100 crore in any fiscal year.
The new budget would also eliminate the expenditure cap, allowing them to sell and market their products to clients while simultaneously spending on research and development.
In an interview, Rizwan Rahman, president of the Dhaka Chamber of Commerce and Industry, stated that while the startup sandbox would undoubtedly assist to grow companies, the government should closely oversee them to prevent any exploitation of the facilities.
Sarwar Kamal, the founder of a new startup named Chardike Limited, said,
“Such facilities will be very encouraging for new startups like us.”
Young entrepreneurs do not have enough know-how to maintain various reporting required by different authorities or regulators.
Masum Khan, co-founder, and CEO of Aladin Kids said,
“Giving a relief from the reporting obligation will encourage young entrepreneurs to set up new ventures.”
Bangladesh has experienced a significant transformation in the startup industry in recent years. According to a recent study by Light Castle Partners, Bangladesh currently has over 1200 active startups, with 200 new startups joining the industry every year. Bangladeshi startups have raised roughly $400 million in international investment and created 1.5 million jobs over the last decade.