Facebook gets VAT registration
Social media giant Facebook yesterday received the value-added tax registration from the National Board of Revenue after two years of stalemate.
Three entities of Facebook – Facebook Technologies Ireland Ltd, Facebook Ireland Ltd, and Facebook Payments International Ltd – got the Business Identification Number (BIN) from the Dhaka South VAT Commissionerate, said Pramila Sarker, additional commissioner of the field office.
Facebook's move comes nearly two weeks after Google and e-commerce company Amazon's secured the BINs.
In July 2019, the NBR made it mandatory for tech giants to either set up offices in Bangladesh or appoint agents so that the government can collect VAT on the advertisements and other services provided by them to local firms.
However, internet companies were unwilling to set up representative offices. They were also not interested in paying VAT to the NBR through agents or sharing data on sales containing information about customers on the ground of privacy breaches and security risks.
Last year, the NBR decided to allow tech giants to get direct VAT registration without opening local offices to bring them under the tax network.
However, progress had been slow over the last one year owing to technical and legal complexity, according to officials.
Facebook's local sales agent Httpool Bangladesh Ltd has been paying VAT against ad sales since July last year, said Sarker.
As of April this year, the NBR has received Tk 9.40 crore from Httpool Bangladesh, according to the field office of the VAT.
Besides, many companies also make payments to Facebook through banks and other payment systems, which also cut the VAT at the source.
"We are expecting to see streaming service provider Netflix and technology company Microsoft getting registration soon," Sarker said.
With 4.1 crore users, Bangladesh has the 10th largest Facebook population in the world, according to German database company Statista.
More than 3 lakh stores run operations based on Facebook, with over 1,000 running their business through only the social media platform, which accounts for around 80 per cent of all social media users in Bangladesh, industry people said in December.
Although there is no specific figure of the F-commerce market size, it may range from Tk 300 crore to Tk 350 crore per year.