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8 June, 2018 00:00 00 AM
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Muhith wants to have social media under tax net

5pc VAT to be imposed on ‘virtual business’
Staff Reporter
Muhith wants to have social media under tax net

Finance Minister AMA Muhith has proposed introduction of new provisions in the tax laws over the taxation of virtual and digital sectors, such as Facebook, Google, Youtube, on their incomes earned in Bangladesh.

“I am proposing to introduce new provisions in our tax laws regarding the taxation of virtual and digital sectors such as facebook, google, youtube, on their income earned in Bangladesh,” Muhith said while announcing the budget for the FY2018-19.

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, Finance Minister AMA said.

 “Such measures shall expand our tax base,” he said.

Muhith mentioned that the volume and the nature of cross-border transactions have significantly changed with the progression of economic globalisation and virtual-plus digital economy.

“Our economy is far more open now. As a result, the risk of tax avoidance has significantly increased. Many foreign entities are earning income in Bangladesh through virtual and digital transactions, but we aren’t getting adequate tax from them,” he added.

He said since these virtual and digital business transactions are comparatively new, the tax laws of the country were not sufficiently up-to-date to bring all virtual transactions into tax net.

Earlier, National Board of Revenue (NBR) has forwarded letters to all commercial banks to collect 15 per cent value added tax (VAT) from online advertisements placed by local companies on social media like Google, Facebook and YouTube.

The NBR has also directed its field offices to monitor Google and Facebook.

 

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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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