Huge sums of foreign currency are being smuggled out of the country under the guise of advertising in internet-based foreign companies. However, no one has any exact information about the amount of money going out of the country in this sector. No government department knows how much revenue the country is being deprived of in this sector. Concerned people say that more than a billion rupees are being smuggled abroad every year by advertising on various communication platforms including Google, Facebook, YouTube, Emo, WhatsApp. The government is not getting any money.
In this situation, the government is in the process of bringing the institutions under registration. Two companies have already registered for VAT. The government wants to bring the organizations under registration by formulating laws or policies. Then, besides collecting revenue, propaganda can also be stopped using these platforms. Economists say Bangladesh could also be more vocal in citing the G-7’s tough stance against such institutions.
According to the concerned government departments, pressure has already started to bring multinational companies into the net. Other companies, including Google, YouTube, Instagram, WhatsApp, Facebook, Amazon, Netflix, Microsoft, Emo, TickTock, Like, have been told that if they do not get a quick business registration number or BIN, the National Board of Revenue (NBR) will block their business opportunities in the country. Will take the initiative to give.
Meanwhile, on May 23, YouTube, Instagram, WhatsApp under Google and on May 26, Amazon took BIN as a non-resident organization from Dhaka South VAT Commissionerate. From now on, the two companies will pay VAT by filing regular VAT returns.
NBR officials say some changes have been made to the VAT Act in this year’s budget to make VAT registration easier. Under the new law, the consultancy firm has been exempted from registering these multinational companies. For so many days, the consultancy company had to take the responsibility of the main company. For this reason, no organization showed interest in the registration of these organizations.
Meanwhile, the companies have been seen behaving mysteriously at different times to trap the consumers. In particular, many countries have repeatedly challenged Google’s strategy to capture the advertising market. France last Monday fined Google more than ৬ 260 million for spreading unethical monopolies. The company has changed tunes as the sword of huge fines has come down and said that they are making several changes in their online ad policy not only in France but all over the world.
It is known that foreign companies are using various methods to deceive the common people in order to capture the advertising market. Realizing the opportunity, a clique is using these platforms to engage in anti-government propaganda. In particular, an organized group sitting abroad is carrying out anti-government activities by spending large sums of money, according to various sources. As part of this resistance, the government is working to bring the offices of these foreign organizations to the country.
Meanwhile, a BTRC report submitted to the court found that even though no one has specific information, only three private mobile phone companies have sent around Tk 9,000 crore abroad in five years. This money has been received from Bangladesh through various social media including Google, Facebook, YouTube, Emo, WhatsApp. On April 9, 2009, six High Court lawyers filed a writ petition against several foreign companies alleging revenue evasion. In this context, BTRC highlights the information of advertisement in the online sector.
According to the report, Grameenphone spent 43 crore 31 lakh 25 thousand 629 dollars, Robi 32 crore 13 lakh 36 thousand dollars and Banglalink 26 crore 84 lakh 69 thousand 98 dollars for online advertising. The three companies together spent more than ৪ 104.9 million.
According to BTRC sources, the trend of advertising through internet has increased in the last two years. Online use has increased, especially since coronavirus infections spread worldwide since the beginning of last year. Advertisers are naturally inclined to go online.
Some officials speculate that about Rs 9,000 crore has gone abroad in the previous five years, but at least Rs 5,000 crore has gone abroad in the next two years. In all, in the last seven years, only mobile phone companies have sent Rs 14,000 crore abroad. Apart from this, thousands of advertisers are sending money abroad every day at the level of individuals and organizations. As such, the amount of remittances sent abroad in the last seven years is not less than Tk 20,000 crore. They also say that if it was possible to collect VAT at the rate of 15 per cent, only Rs 3,000 crore would have been deposited in the government treasury in this sector.
Shami Kaiser, president of the E-Commerce Association of Bangladesh (E-CAB), told Kaler Kanth that there are 1,500 companies registered in e-Cab in the country alone. Outside of this many more organizations, even small entrepreneurs have developed at the individual level. Considering the situation, almost all of them are online dependent. They are constantly advertising in foreign companies. Corona has made the online market much bigger than before.
He said the whole world is now a market for Bangladesh. Bangladesh is also a market for the whole world. The important thing here is to fix the policy of the process or how the organizations will come to the tax. The policy should be done in such a way that no domestic organization or entrepreneur is harmed.
National Board of Revenue (NBR) member (VAT policy) Masood Sadiq told Kaler Kanth, “We are working to bring multinational companies under VAT registration. For this, I have made some changes in the VAT law in this year’s budget. Earlier, companies like Google, Facebook and Amazon had to register in Bangladesh and the consulting firm had to take all the responsibility of these companies. So they could not be interested in registration. Now by changing the law we have made provision to take responsibility only to the registered organization. We want these institutions to come under VAT registration. If it does not come even after that, we will take action according to the customary law of the country. These institutions will be closed in Bangladesh through BTRC.
Department of Audit, Intelligence and Investigation (Value Added Tax) Director General. Moinul Khan told Kaler Kanth that online platforms including Google, Amazon, Facebook, YouTube, Netflix have been paying VAT to the government through banks. The government has received VAT at the rate of 15 per cent on all the transactions made on behalf of these institutions through credit cards. But these are all happening in isolation.
Asked about the transactions and profits of these companies in Bangladesh, he said, “We do not have any such account so far. Because for so long they have not been in any of our processes. We did not know anything about their income and transactions. There was no opportunity to know how much VAT these institutions paid or how much money the bank took VAT from which institution. In other words, there was no method of storing VAT information. For this, VAT registration of the companies is necessary for proper calculation and collection of revenue.
Pramila Sarkar, Additional Commissioner, Dhaka South VAT Commissionerate, told Kaler Kanth that work is underway to bring multinational online platform-based organizations under registration soon. Meanwhile, Google (YouTube, Instagram, WhatsApp) and Amazon have registered VAT. Facebook has also prepared all their papers. Facebook will also register next week. In addition, those who have Netflix, Microsoft and others, they also have to take VAT registration. Or they will not be able to do business in Bangladesh. According to the law, BTRC will stop these.
Iftekharuzzaman, executive director of TIB, told Kaler Kanth, “Multinational companies like Google and Facebook have been doing business in Bangladesh for a long time. We have already been talking about bringing them under the tax with a separate policy. Now is a good time. Because the G-7 alliance of developed countries has decided to impose high tax rate on the income of these organizations. Bangladesh can take this opportunity.
Economist Ahsan H. Mansoor told Kaler Kanth: If 15 percent VAT is collected, then 26 and a half percent corporate tax will have to be collected along with it. For this, the concerned wing of the government can take NBR information from BTRC, Bangladesh Bank etc. If you do not do this, you will be satisfied with what they give you. ‘