Digital platforms including Facebook, Google and YouTube “are reluctant” to come under Bangladesh’s tax network, The Daily Star reported. Bangladesh’s new VAT (value added tax) laws – which came into effect on July 1, 2019 – require these companies to either set up offices in Bangladesh or appoint agents so that the Bangladeshi administration can collect VAT on the advertisements made on their platforms by local companies.
What the government stands to earn: In June 2019, the National Board of Revenue (NBR) had directed social media and foreign satellite television channels, with no offices in the country, to pay 15% VAT through a VAT agent from FY2019-20, or set up an office in Bangladesh. The NBR is preparing a policy note to get VAT from foreign tech companies operating in Bangladesh, per the report.
Telecom Minister to meet Facebook today: Bangladesh’s Telecom Minister Mustafa Jabbar is scheduled to meet Facebook representatives, led by its public policy manager Varun Reddy, today. Setting up a local office in Dhaka and getting a VAT registration from the NBR are reportedly high on the agenda.
Repeated notices to tech companies have gone unanswered: The Bangladesh Telecommunication Regulatory Commission (BTRC) had asked the three companies to open offices in Bangladesh in February 2019 and release a report on the revenue they generated from Bangladesh, the report said before adding, that the BTRC received no response.
Thailand is planning to tax digital companies: Thailand is also mulling implementing a value-added-tax (VAT) on electronic businesses next year, with an aim to tap the boom of e-commerce in the country.
Indonesia had similar plans, but backtracked: Indonesia had announced a similar VAT on e-commerce companies operating in the country in January this year. However, in May 2019, the government retracted from the tax regulation and revoked it, as it faced pushback from digital companies.