Facebook pays $ 0.288 m in VAT for first time in progressive Bangladesh

Thursday, 12 August 2021 00:24 - - {{hitsCtrl.values.hits}}

www.dhakatribune.com: Social networking giant Facebook has paid Tk 2.44 crore (around $ 0.288 million or SLRs 56 million) in Value Added Tax (VAT) for the first time in Bangladesh, a month after its registration with the National Board of Revenue (NBR.)

Earlier, after two years of perusal, the tech giant acquired a business identification number (BIN) on 13 June, following Google, and Amazon, when the NBR made it mandatory for tech giants to either set up offices in Bangladesh or appoint agents.

PricewaterhouseCoopers (PwC), Facebook’s local agent, had submitted the amount to the Dhaka South VAT Commissionerate.

Prior to this, the company’s agent Httpool was paying indirect tax to the NBR.

Facebook Ireland Ltd., Facebook Payments International Ltd., and Facebook Technologies Ireland Ltd. paid Tk 24,327,599, Tk 24,070, and Tk 25,006 respectively for the month of June.

Sources at PwC, Dhaka South Customs, Excise, and VAT Commissionerate, and Httpool Digital Ltd. confirmed the matter to Dhaka Tribune.

Although the social media giant had been paying VAT, it did not have a registered BIN prior to its recent registration.

In 2020, Facebook Inc. was pressured by the NBR to designate an agent in Bangladesh to operate locally.

The Bangladesh government took the initiative of bringing foreign companies under the registration and VAT process in 2019, as Tech giants — Google, Amazon, and Facebook — had been making around Tk 3,000 crore from Bangladesh annually.

All large companies, including Multinational Companies (MNCs) — Reckitt, Marico, Foodpanda — and local companies— Pathao, Evaly, and others — use digital media for advertising products and services.

Tech giants are earning local revenue, said an official of PwC talking to Dhaka Tribune.

Nearly all large companies are now advertising on digital media. Additionally, these companies have a large business here through e-commerce, advertisements, apps, Gmail, and other services. Service users pay these tech giants via international credit cards, he added.

Although tech giants have been trying to register, the NBR did not have an efficient online registration process. But the recent changes in the online registration in the last six months, have made it easier for foreign companies to register and pay VAT, said the official of the local consultant firm.

However, there are issues that still need to be addressed.

The tech giant is paying VAT to the NBR on behalf of unregistered users who did not register with the regulatory authority. Registered users already pay VAT to the banks that do not reach them. If the tech giant pays VAT again without receiving it from the user, it simply becomes a case of double taxation, explained an official of PwC to Dhaka Tribune after it had received the BIN.

NBR has been heavily implementing and upgrading systems that will ease the process further. Although there were technical issues regarding registration an NBR official assured of those being addressed gradually.

(Source: https://www.dhakatribune.com/business/2021/07/31/facebook-pays-2-44c-in-vat)