Government to Grant VAT Exemption for E-commerce

Eastern Bank Limited (EBL) has extended a Tk1 crore startup loan to ShareTrip, a prominent travel booking site in Bangladesh. This funding initiative is part of EBL's "EBL Startup Explorer" program, which collaborates with Startup Bangladesh, a venture capital company under the Ministry of ICT in Bangladesh, to provide loans to startups. The loan disbursement ceremony took place at EBL's head office in Dhaka, attended by key figures including the Director of Bangladesh Bank, as the chief guest.

Bangladesh's e-commerce sector holds immense potential for growth, but strategic investments are crucial to capitalize on this opportunity. According to industry experts, there are two key investment areas. Firstly, altering consumer behavior, as witnessed in India through subsidized cell phones. Secondly, enhancing infrastructure, particularly last-mile delivery services, to ensure efficient and seamless operations. Compared to neighboring markets like India and Indonesia, Bangladesh's e-commerce investment remains minimal, with just $2 per capita. To drive progress, experts suggest increasing this investment to at least $10 per capita, enabling the adoption of successful strategies while accounting for local nuances.

The E-Commerce Association of Bangladesh (e-CAB) and the Canada-Bangladesh Chamber of Commerce and Industry (CBCCI) have signed a Memorandum of Understanding (MoU) to enhance business opportunities between the two countries. The collaboration aims to explore trade prospects and participate in the upcoming "CBCCI Trade Expo 2023" in Toronto from November 17 to 19, 2023. The President of e-CAB highlighted the vast opportunities for Bangladeshi e-commerce entrepreneurs abroad and expressed the organization's commitment to participate in international events to explore these prospects.

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.

Scaling up methodology is proving to be a game-changer for emerging businesses in Bangladesh, enabling sustainable growth and exponential results. In a recent workshop titled "Scaling Up Business Growth Workshop," organized by prominent associations and eGeneration Limited, industry experts emphasized the significance of adopting this approach. Startup Bangladesh's Managing Director pledged ongoing support to startups, acknowledging their transformative role in the country's development.

The Netherlands government has launched the "Orange Corners Incubation Programme" in Bangladesh, providing support, skills, funding, and resources to young entrepreneurs. This initiative aims to transform their innovative ideas into sustainable businesses. The programme offers world-class training, funding opportunities of up to 50,000 Euros, and a global network to help entrepreneurs elevate their ventures. Applications for the programme are open until early June 2023. Selected participants will attend a selection boot camp in late June 2023, and the most promising teams will be onboarded to the first cohort in July 2023.