CPD urges NBR to tax Facebook, Google, Netflix

Experts in the technology sector in Bangladesh have called for big tech companies like Facebook and Google to be brought under the purview of domestic policy regime for tax purposes.

The experts made their case during a discussion organized by the Center for Policy Dialogue (CPD) on Saturday in the city, where they discussed the opportunities and trade-offs associated with taxing the digital economy. Currently, these tech giants are under VAT rules, but experts argue they should have local representatives and offices in the country to make it easier to catch them and collect the taxes.

CPD executive director Dr Fahmida Khatun highlighted the importance of the digital economy in the country for internal revenue evaluation and increasing tax rates. She noted that there are many big international companies in the country that have a presence, but not from a revenue point of view. CPD Honorary Fellow Professor Dr. Md. Mostafizur Rahman stressed the revenue collection opportunity presented by companies like Facebook and Google, and the need to mobilize two and a half lakh crore Taka in three years as part of IMF program.

Chief guest in the discussion Kazi Nabil Ahmed, Member of Parliament (Jessore-3) said companies like Facebook and Google are doing good business in Bangladesh. Their shadow is in Bangladesh, but not their body. Due to this, it has become difficult to catch them. Rules have been made that they should have their local representatives.

In the panel discussion, BASIS director Habibullah Niamul Karim argued that digital economy is not a separate economy and that small entrepreneurs are not covered by VAT. He suggested that if VAT were imposed on e-commerce, small entrepreneurs would not be significantly affected.

Md Shahabuddin, Vice President of e-cab, predicted that as e-commerce expands, the digital economy will grow faster and more tax collection will be possible if Bangladesh creates more than 10-20 unicorns.

Tanjiba Rahman, Chairman of Bangladesh Freelancer Society, spoke about the challenges facing freelancers, including high taxes and VAT. She argued that more taxes would discourage young people from entering the sector.

Mohammad Nasir Uddin, former chairman of NBR and former member of Anti-Corruption Commission (ACC), highlighted the need for full automation at the Board of Revenue to address the many problems with the tax structure.

Overall, experts agreed that while there are many opportunities for revenue collection in the digital economy, there are also many challenges, including the need for clarifying business models and the potential impact of taxes on small entrepreneurs.

Bringing big tech companies like Facebook and Google under domestic policy could help address some of these challenges and make it easier to collect taxes.