Published at: The Financial Express, May 12, 2019
The Bangladesh Telecommunication Regulatory Commission (BTRC) has taken a decision to allow the US-based online streaming entertainer platform Netflix to set up a cache server in the country.
Only licensed National Internet Exchange (NIE) operators can set up cache servers for Netflix, according to a recent BTRC decision.
“But discussions are still going on with Netflix about revenue sharing from their Tk 2.0 billion earnings in the country and setting up their own office here,” an official at the BTRC told the FE.
He said the Netflix was earning a lot of money from their subscribers in Bangladesh and they must share revenue with the government.
“The decision to allow setting up a cache server will pave the way for setting up their office here,” he said.
At present, there are no clear tax obligations tagged to the use of Netflix.
But there is a High Court rule to realise taxes from online platforms.
In April last year, the High Court (HC) ordered the government to realise taxes, including source tax, from all online transactions, advertisements, domain
sales and licence fees from all internet-based platforms such as search engines Google and Yahoo, e-commerce platform Amazon, social networking platform Facebook and video sharing site YouTube.
The HC bench, comprising Justice Moyeenul Islam Chowdhury and Justice Md Ashraful Kamal, also asked the government to form a special committee to assess the quantum of their financial transactions in recent years and submit an assessment report to the court.
According to the research and consultancy firm PI strategy, the Netflix generated Tk 2.0 billion in revenue from its Bangladesh operation last year without having to pay any tax.
On the other hand, local Over-The-Top (OTT) media providers such as Bioscope, 3rdBell and Rabbithole are subject to local taxation laws on their services, which some people within the industry have termed ‘unfair’.
The BTRC official said it was certainly unfair. But it remained a global problem, the solution should come from the global stage.
In Bangladesh, consumers are unable to pay for the Netflix service in the local currency.
Therefore, access to an international credit card becomes a prerequisite. Although foreign exchange transactions are heavily regulated, the central bank currently allows online purchase of goods and services, with a US$300 limit on a single transaction. The card holders are liable for all tax or duty obligations.
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