The government has decided not to impose a 4 percent value-added tax on e-commerce as proposed in the budget for the next fiscal year, considering the fledgling state of the sector.

The government also reduced the supplementary duty on internet use to 2 percent from the proposed 5 percent.

"Taking into consideration the early stage of internet and e-commerce in the country I have come to this decision," Finance Minister AMA Muhith said in his wrap-up speech on fiscal 2015-16's budget in parliament yesterday.

The 5 percent supplementary duty on voice and SMS services will remain.

The National Board of Revenue has implemented it on the very day the budget proposal was placed in parliament.

The twin decisions will help the e-commerce sector that clocks up Tk 100 crore in annual sales, said Shameem Ahsan, president of Bangladesh Association of Software and Information Services.

BASIS along with Zunaid Ahmed Palak, the state minister for ICT, had earlier requested the finance minister to reconsider the proposals. 

As of May, there are 4.59 crore mobile SIMs that are connected to the internet, as per the telecommunication regulatory commission's data.