‘Virtual business’ under VAT net

Finance minister Abul Maal Abdul Muhith on Thursday proposed 5 per cent VAT on all types of ‘virtual business’.

In his speech for 2018-19 budget, he said, “With the fast development of internet technology, social media and mobile application platform based virtual business are booming. In order to bring these online based virtual businesses within the tax net a new service code has been defined as “Virtual Business” on which 5 per cent VAT shall be imposed.”

He said a new law titled 'Income Tax Act' would be made at the beginning of the new financial year.

He mentioned that digital and virtual business is replacing conventional business, thanks to information and communication technology.

“In order to keep pace with these changes, we need radical reform in our tax system.”