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Government to Grant VAT Exemption for E-commerce

Industry: E-Commerce, Start-Up

The e-commerce sector in Bangladesh is set to receive a boost as the government plans to exempt online marketplaces from value-added tax (VAT) on sales in the upcoming fiscal year budget. This move, based on information from the Ministry of Finance and the National Board of Revenue (NBR), aims to attract foreign direct investment and reduce business barriers.

Under the proposed provision, online marketplaces will be classified and exempted from VAT on digital commerce. Currently, they only pay VAT on their own goods or services, not on the provision of services. Experts have welcomed this initiative, citing its potential to alleviate taxpayer burdens and stimulate investment in the sector. They also urge the government to consider withdrawing or reducing the 15% VAT on delivery charges to promote online sales and support digitization efforts.

With Bangladesh’s e-commerce market experiencing rapid growth and offering significant investment potential, these measures are expected to create a favorable environment for the sector’s development.

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