Bangladesh Association of Software and Information Services yesterday called for a 20 percent cash incentive on exports -- a plea that has been straight away shot down by the finance division.

The plea was made at a meeting with Finance Minister AMA Muhith at his office, where State Minister for ICT Zunaid Ahmed Palak batted for BASIS.

BASIS President Mustafa Jabbar said the industry is capable of earning $1 billion from exports this year.

The industry's annual exports have already crossed the $700 million-mark. “We can achieve the $5 billion target before 2021,” he added.

Palak said the incentive would boost exports significantly.

In response, Mahbub Ahmed, senior secretary of the finance division, said: “I have strong reservation about cash incentive. It would not be right to make the industry dependent on the government.”

Instead, he recommended extending policy support to help the industry stand on its own feet.

When it was pointed out that the garment sector was given incentive in its teething years, Ahmed said: “It was necessary 30 years ago. The government is still unable to come out of the cycle.”

Palak said if the industry gets only 20 percent cash incentive for five years it will perform as well as, if not better, than the garments sector and create millions of new jobs.

ICT is a 100 percent value addition sector but the garment sector is not.

“After five years if the ICT sector fails to yield the expected returns, you can withdraw the incentives, we will not object,” the state minister told the finance minister.

Muhith, however, said he will have to discuss the issue further with the commerce minister.

Jabbar also urged the government to incorporate e-commerce into the tax holiday facilities.

Replying to a question, Muhith said the government is investigating the tax benefits obtained by Muhammad Yunus in favour of various companies bearing the Grameen name.