The Financial Express

E-commerce in Bangladesh mostly untaxed still: NBR chief

| Updated: March 12, 2021 20:28:46

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Despite rapid expansion of the e-commerce industry in the country, there hasn't been any effective mechanism to trace and collect revenue from the sector.

"It is very difficult to bring the industry under tax net as there are many online businesses selling products through social media platforms apart from online marketplaces," said National Board of Revenue (NBR) Chairman Abu Hena Md Rahmatul Muneem on Thursday.

However, he said, the revenue authority has been in discussion with the ICT division and the Ministry of Industries to develop a system to bring all the e-commerce companies under one platform.

Mr Muneem made the observations at a pre-budget meeting with the e-Commerce Association of Bangladesh (e-CAB) held at the NBR headquarters in the city's Segunbagicha.

Presided over by NBR chairman, the programme was also addressed by NBR Member (tax policy) Md Alamgir Hossain, e-CAB President Shomi Kaiser, its Vice-President Mohammad Sahab Uddin, Director (International Affairs) Zia Ashraf, and Director (Corporate Affairs) Asif Ahnaf, among others.

The easy service delivery and digital payment options are the reasons behind the fast growth of e-commerce industry, said Mr Muneem, adding, "It is good to see a sector developing; but not just us, the whole world is struggling with taxation of such business."

The sector has expanded banking on low operating costs compared to traditional businesses, since it does not need decorated office, warehouse, manpower, etc., he also said.

Speaking at the programme, e-CAB leaders urged the government to exempt VAT and tax on digital payment for products purchased from online marketplaces.

e-CAB President Shomi Kaiser said at least 40 to 50 per cent of the payments in the online marketplaces were done digitally.

The VAT exemption will encourage more people to pay online against their purchase, she added.

Besides, she urged the revenue authority to recognise e-commerce sector as information technology enabled services (ITES) so that they could avail tax benefits.

She also informed the meeting that there were around 1,500 companies registered with the e-CAB while the number of companies outside the platform would be twice the size of the registered ones.

The association also proposed slashing the 15 per cent VAT on product delivery directly done by the seller company, while the rate should be cut to 5.0 per cent if the delivery company is a third party.

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