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13 July, 2019 01:01:19 AM

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Google, Facebook yet to appoint VAT agents

TAREQUE MORETAZA, DHAKA
Google, Facebook yet to appoint VAT agents

Companies like Google, Facebook, YouTube did not show any interest in appointing VAT agents till Thursday last.

According to NBR sources, the advertisement income of these global firms, earned from

digital media, must be resolved through VAT agents from the beginning of the new fiscal year on July 1.

Many organisations have advertised for recruiting VAT agents through their websites and social media.

Jahurul Haque, chairman of the Bangladesh Telecommunication Regulatory Commission (BTRC), told The Independent that the

BTRC would fully cooperate with the NBR to collect VAT.

The National Board of Revenue (NBR) wants to put a brake on the activities of foreign

digital platforms, such as social media giants and TV channels, if they fail to appoint VAT agents for broadcasting advertisements in Bangladesh.

The NBR has said this in letters to the Bangladesh Telecommunication Regulatory Commission (BTRC) and the information ministry, stating that VAT for digital platforms has been kept at 15 per cent.

In the proposed budget for FY2019–20, the government has reduced VAT from 15 per cent to 7.5 per cent for advertising and

services offered on digital platforms, but kept it at 15 per cent in the final budget.

Earlier, the NBR had directed foreign platforms to appoint local VAT agents to broadcast advertisements in Bangladesh from the next fiscal year.

The local agents would have to pay

15 per cent VAT on behalf of the foreign entities, it had said.

The revenue authorities gave the directive to rev up the implementation of the VAT and Supplementary Duty Act 2012 from July 1. The NBR has taken the step to mop up untaxed money from online advertising which is said to be siphoned off from the economy of the country.

In the letter, the NBR sought the BTRC’s support to realise VAT from the app-based telecom services like Imo, Truecaller, WhatsApp, Viber, Facebook, Google, YouTube, LinkedIn, Twitter, and app-based entertainment services like Netflix and hoichoi.

A senior BTRC official said they have received the letter.

“Controlling these media outlets is a complicated matter. The commission will initiate steps to enhance the government’s revenue growth,” he added.

Satellite channels like Zee Bangla, Star Jalsha, Star Sports and all other foreign channels airing advertisements in Bangladesh will come under the tax net.

In response to a writ petition,  court asked the government to form a special committee to assess its financial transactions in recent years and submit a report by June 25.

In November 2017, the Newspaper Owners’ Association of Bangladesh (NOAB) sent a letter to the finance ministry, the central bank and the NBR voicing its grievance over the rise in digital advertisements.

Facebook and Google earn a huge amount of money from digital advertisements, but they do not pay any tax, the association said.

The two tech giants (Facebook and Google) have no office in Bangladesh and hence they remain out of the purview of Bangladesh’s laws. But it is mandatory that every company that wants to do business in any country complies with the local laws.

To bring the income of the tech companies under the tax net, the NBR slapped a 15 per cent withholding tax this fiscal year on ‘advertisement income or digital marketing’. In addition, a 15 per cent VAT is to be paid by the advertisers on the bills served by digital companies.

EA

 

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Editor : M. Shamsur Rahman

Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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