Global social media platform Facebook will comply with the country’s tax rules once the entire process regarding taxation is completed, said Facebook South Asia public policy director Shivnath Thukral. Facebook will appoint a local representative within next four to six weeks to ensure payment of value-added tax from their advertisement earnings from Bangladesh market.
The development came in a recent meeting between Telecom Minister Mustafa Jabbar and eight Facebook officials.
The Silicon Valley-based company has already floated a recruitment advertisement for the position of ‘Public Policy Manager, Bangladesh’.
In the meeting, Facebook confirmed that they will comply with all the request of the government, but at the same time, they reiterated that it won’t be sustainable for them to set up an office in Dhaka right now.
Digital advertisement is progressively accounting for a lion’s share of companies’ advertisement budgets, but the National Board of Revenue hardly sees any VAT flowing in from the digital platforms as those have no VAT registration.
Besides, payment for digital ads are mostly made bypassing the banking channels. The NBR took the issue very seriously and sought help from the BTRC to ensure that the three tech giants set up offices in Bangladesh.
The commission first asked the three platforms in February to set up offices in Bangladesh, submit a report on their revenue generated from the country and ad-links accounts and payment method. But no response was found. Then in the new VAT law, which took effect on July 1, the NBR has made it mandatory for the tech giants to either set up offices in Bangladesh or appoint agents such that the government can collect VAT on the advertisements made on their platforms by local firms.
As per rules, the NBR is supposed to get 15 percent in VAT and another 4 percent in advance income tax.
Telecom division officials also asked Facebook to sign an agreement to provide security information but the social media giant declined to as such types of deals should be done under government-to-government protocol.
Facebook also promised to promote correct Bangla language on their platform and if needed they will move for partnership with a local university and appoint professors in this regard.
As of August, there are about 9.81 crore active internet connections in Bangladesh, according to the BTRC. There are 3.50 crore active Facebook accounts in Bangladesh.
