Home ›› 07 Apr 2023 ›› Front
The Bangladesh Bank recently sent a letter to the National Board of Revenue (NBR), requesting it to clarify the tax rate for digital advertisements on Google, Meta, and similar platforms.
Various advertising agencies, such as Axiata Digital Bangladesh, Asiatic Marketing Communication, and Havas Media, pay 15 per cent tax on digital ads displayed on Google or Meta. However, some agencies and companies, such as Grameenphone and Mediacom, pay 20 per cent.
The central bank detected this discrepancy while checking some bank documents of the agencies.
“Advertising agencies pay taxes on digital ads at two different rates by showing different service names and taking advantage of the ambiguity in the previous NBR letters issued in this regard,” the central bank letter read.
It said the government is losing a huge amount of revenue as banks are deducting lower taxes from the advertising agencies in this regard.
“Axiata Digital Bangladesh (Pvt) Ltd, Asiatic Marketing Ltd, Asiatic Mindshare Ltd, and Havas Media Ltd are paying 15 per cent tax on displaying digital advertisements on Google, Meta, and similar platforms,” the letter read.
It said as per one of the previous NBR letters, though broadcast advertising taxation is set at 20 per cent, various banks deduct 15 per cent from the agencies, which was revealed during the approval to consider earnings through Google Asia Pacific Pte Ltd or Meta as remittances.
Meanwhile, for the same types of advertisements, companies like Grameenphone, Mediacom, and Httpool Bangladesh are paying 20 per cent tax, the central bank said.
It also said different companies use different names for the same service to pay taxes at different rates. For example, some companies name it digital marketing while others say it is broadcast advertising.
The central bank said the approval of the remittance application is being interrupted due to the different tax rates.
Seeking anonymity, a senior official of NBR said, “If advertisements are broadcast at television or radio frequency, those will be considered broadcast advertising, which has 20 per cent tax.”
“However, advertisements published on the internet, such as on Facebook or Google, will be considered digital marketing. This has 15 per cent tax.”
The revenue board had earlier explained the matter to the central bank and also mentioned which rate will be applicable for what medium, he said.
“But if the NBR chairman asks us to send the clarification again to the central bank, we will do that by next week,” he added.
