The e-Commerce Association of Bangladesh on Saturday proposed that the government should define virtual businesses and online product sales with a view to clear up the confusion surrounding the taxation on the sector in the proposed budget for 2018-19.
The confusion surfaced after the finance minister on Thursday said, ‘With the fast development of internet technology, social media and mobile application platform based virtual business are booming. In order to bring these online based virtual businesses within the tax net a new service code has been defined as “Virtual Business” on which 5 percent VAT shall be imposed.’
The e-Commerce Association of Bangladesh came up with the call at a press briefing on the proposed budget at the National Press Club in Dhaka.
E-CAB president Shomi Kaiser said the confusion should be eliminated so that the e-commerce entrepreneurs, who were struggling to survive, got some respite from tax hassle.
Although the NBR chairman Md Mosharraf Hossain Bhuiyan on Friday clarified that the issue of imposing 5 per cent VAT on virtual business was meant for social media like Youtube and Facebook, Shomi said if the issue of ‘virtual business’ and ‘online product sales’, which were mentioned in the finance minister’s budget speech, remained unchanged, then the NBR officials may mix it up and e-commerce businesses may face hassle.
She, however, said, ‘We do not have any objection if government wants to impose VAT on the use of social media like Facebook and Youtube.’
E-CAB president also proposed that the government should consider e-commerce businesses as information technology-enabled services so that they could enjoy tax break and get the scope to grow.
Considering the initial stage of the sector, government should announce a tax break facility for the sector for at least 10 years, said Shomi Kaiser, also the managing director of Dhansiri Communication.
Vice-president Rezwanul Haque Jami said the new tax would be a burden on them as they were already paying 25-40 per cent taxes on their income.
General secretary Md Abdul Wahed Tomal requested the government to exclude digital content development and management, digital graphics design, search engine optimisation, web listing, documentation and some other services from IT-enable services.
Bangladesh Association of Software and Information Services digital standing committee chairman Syed Mohammad Kamal said the government should announce tax break for the e-commerce sector.