Home ›› 30 Apr 2023 ›› Front
Centre for Policy Dialogue (CPD) has urged the National Board of Revenue (NBR) to tap the opportunities to boost revenue, bringing tech giants like Facebook, Google and Netflix under the tax net.
CPD’s Distinguished Fellow Prof Mustafizur Rahman made the call while presenting a keynote paper at a dialogue titled “Taxing the Digital Economy: Trade-offs and Opportunities” held in the capital on Saturday. The dialogue is part of the project on the public financing system in Bangladesh funded by the European Union.
Prof Mustafizur said that although a good number of international online platforms are making profits from the Bangladesh market, they have hardly contributed to revenue.
“To submit tax returns by these platforms, legal provisions need to be put in place so that they can avail Taxpayer Identification Number (TIN),” he said, adding that at present, non-resident digital service providers are not under the tax net and hence they are not bound to submit their tax returns in Bangladesh.
“They do not have any TIN. So, they are not paying income tax as well. Though Google and Amazon have Business Identification Number (BIN), they do not have any TIN. They only pay VAT to NBR.”
He further said that digital ad spaces receive commercial ad worth at least Tk 2,000 crore from Bangladesh through Facebook, Google, Amazon, and other internet-based firms every year. Netflix has around 200,000 active subscribers in Bangladesh with earnings of about Tk 200 crore as subscription. There is a rise in local OTT platforms like Chorki, Bioscope, Toffee etc.
In Bangladesh, revenue from OTT video streaming platforms is projected to reach US$ 152.7 million in 2023 and the number of users is projected to reach 11.3 million by 2027, he said.
He, however, said that this is not the accurate figure of freelancers in the country due to the absence of widely accepted payment gateways such as PayPal in Bangladesh.
Panelist Habibullah Neyamul Karim, also Director of Bangladesh Association of Software and Information Services (BASIS), expressed his doubt over collecting revenue from their (tech giants) income. But consumption tax can be collected from them.
Economists, sector experts, IT businessmen and service providers said that this is high time to reform the business and its related government facilities to generate possible best revenue from it.
While the country is trying hard to fulfill the conditions set by International Monetary Fund (IMF) before approving its loans, the digital economy could be a potential sector in this regard, they observed.
Issues like nurturing young entrepreneurs, easing the taxation system for small entrepreneurs, ensuring balanced policy for all dimensions IT businesses were recommended.
CPD Distinguished Fellow Debapriya Bhattacharya said that reform of digital business model is needed to earn more revenue by the government, making the decisions over whether it will be under B2B or B2C process.
“From the discussion, it can be said that the model would be formed on five principles like transparency, neutrality, fairness (equilibrium), efficiency and will have a simple (government) process,” he added.
He said the reform process should be a holistic approach and while dealing in the context it will ensure fulfilling three IMF conditions–reducing the tax-GDP ratio, (fixing) exemption and expenditure issues and efficacy of the system.
Kazi Nabil Ahmed, MP attended the programme as the chief guest while Ahsan Adelur Rahman, MP as the special guest. The event was chaired by CPD Executive Director Dr Fahmida Khatun.
e-cab, BFDS want tax exemptions till 2030
Vice President of e-Commerce Association of Bangladesh (e-CAB) Mohammad Sahab Uddin and Chairman of Bangladesh Freelancer Development Society (BFDS) Dr Tanjiba Rahman said the continuation of tax exemption is needed for the development of the sector.
In Bangladesh, the businesses of software development and information technology enabled services (ITES) will get CIT exemption up to June 2024.
Sahab Uddin said that there was only two companies in the country last year when the government gave tax exemption on e-learning platforms. Now the number of such companies increased to 12.
Dr Tanjiba said that freelancers of the country are currently low paid and still they can get only Tk30 out of Tk100 from their attempts.
“So, we merely enjoyed tax exemption facilities right now. At this moment, if more tax burden is imposed without easing the money transition process, it will discourage freelancers.”
Bangladesh is the second largest supplier (approximately 6.5 lakh freelance workers) at 14.3 per cent, behind India's 18.4 per cent. Bangladesh ranks 8th among the top 10 countries for freelancing income with a growth rate of 27 per cent while India ranks 7th with a growth rate of 29 per cent.
