Govt offers major tax break on server imports

The government has waived more than half of the total tax incidence on server imports to promote cloud infrastructure and data centre development amid growing adoption of artificial intelligence.

The National Board of Revenue (NBR) issued a gazette notification on August 17, making the concession effective immediately.

Tap here to add The Daily Star as a trusted source

Currently, the total tax incidence on server imports is nearly 24 percent. Following the notification, the rate has been reduced to 9.5 percent, including 7.5 percent advance tax, said a tax official, seeking anonymity.

The move follows stakeholders’ negotiations with the government during the budget session for 2026-27, the official added.

The decision is expected to reduce the cost of server imports and support the expansion of digital infrastructure for businesses and organisations.

According to the NBR notification, the exemption applies to servers imported under HS Code 8471.50.90.

The notification said importers of the specified servers would be exempted from customs duty, regulatory duty, supplementary duty, if applicable, and value-added tax (VAT) as specified in the first schedule of the Customs Act.

The concession comes as demand for computing capacity and data infrastructure is rising with the growth of digital services and technology-driven businesses in Bangladesh.

“As we promised, we are committed to reducing the total cost of servers, as this will support the development of data centres and cloud infrastructure. These facilities will also play a critical role in accelerating artificial intelligence adoption in our country,” said Rehan Asad, telecom and ICT adviser to the prime minister.

Industry stakeholders welcomed the move.

“I think it is a positive move. In the budget, similar benefits were provided for imported laptops, which will help expand digitisation,” said AKM Fahim Mashroor, former president of the Bangladesh Association of Software and Information Services (BASIS).

“However, import duty on smartphones remains very high, resulting in low smartphone penetration,” he said.

“Smartphones are now the primary digital access devices for most people. Therefore, they should be treated in the same way as laptops and servers,” he added.