Facebook, Google, YouTube must be VAT registered from 1 July

Prothom Alo English Desk | Update:

Facebook, Google, YouTube must be VAT registered under new VAT law. Photo: BSSTo run business in Bangladesh, the internet giants such as Facebook, Google, YouTube and other digital platforms have to file VAT registration once the new Value Added Tax (VAT) law comes into force from 1 July, reports BSS.

The National Board of Revenue (NBR) has taken the move with the aim of collecting untaxed money from the online-based advertising which is being siphoned off from the economy.

So, the companies have to either set up offices in Bangladesh or appoint agents to pay VAT for running advertisements and other businesses in Bangladesh, said officials.

Talking to BSS, NBR’s VAT Online Project Director Syed Mushfikur Rahman said the government does not get mentionable VAT from the most popular social networking site Facebook, video streaming site YouTube, search engine giant Google and other digital platforms.

“Actually, these sites and platforms have no offices or agents in Bangladesh, but now they have to do business complying with the local law,” he said.

NBR officials said as per the section 19 of the “Value Added Tax and Supplementary Duty Act 2012” companies like Facebook, Google and YouTube have to go for VAT registration and pay VAT through local offices or agents.

However, the NBR has no data regarding business volume of these companies as the lion’s share of the money is being channelled through unauthorised ways.

e-Commerce Association of Bangladesh (e-CAB) general secretary Muhammad Abdul Wahed Tomal told BSS that in Bangladesh there are over 50,000 facebook pages which are running e-commerce business.

“But unfortunately, we have no data about them as they are not associated with e-cab,” he said, revealing that e-CAB has 950 members at present.

Replying to a query, Tomal said generally, over 25,000 to 30,000 parcels are delivered daily and that rises up to 45,000 ahead of Eid or other occasions and the e-commerce market turnover is Tk 8-10 billion annually.

Industry people said major e-commerce organisations spend $8000-10,000 monthly for digital marketing which means it goes up to $100,000 annually.

The e-cab general secretary said e-commerce or facebook-based e-commerce businesses spend at least $5-10 every day boosting their advertisements.

Market insiders said companies like Facebook and Google and its subsidiary YouTube receive huge amounts of advertisement revenue from Bangladesh annually but the companies are not registered in the country.

As they have no VAT registration in Bangladesh, they said, there are no estimates of how much money is being siphoned off abroad for the purpose of advertisement in these sites and platforms.

Moreover, telecom companies and other big corporate organisations are also leaning towards digital advertisement as well.

e-CAB general secretary laid emphasis on the necessity of legal channels for advertisement and other businesses in Facebook, Google, YouTube and other digital platforms.

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