Facebook starts paying VAT

The National Board of Revenue's (NBR) efforts to make Facebook fall in line with local regulations have started to pay off as the global social media giant handed about Tk 1.7 crore in value-added tax for the months of July and August.

Facebook's authorised sales partner Httpool has handed over the VAT to the state coffer.

It also solved the mystery of how much Facebook earns from Bangladeshi companies, which are now increasingly relying on digital platforms for advertisements.

In August, the Facebook agent sold advertisements worth Tk 6.23 crore to various local organisations.

In return, they paid Tk 91.39 lakh in VAT.  As per the rules, the NBR gets 15 per cent in VAT and another 4 per cent in advance income tax.

"It's a significant advancement in VAT collection as a global tech company like Facebook came under the tax net," Moinul Khan, director general of VAT Intelligence, told The Daily Star yesterday.

According to Khan, Facebook completed VAT registration a few months earlier and it came under the VAT law from the start of this fiscal in July.

Earlier, the NBR found that digital ad agency Httpool did not pay any VAT for July, despite receiving advertisements worth over Tk 5 crore from different companies.

In August, the VAT Audit, Intelligence and Investigation Directorate (VATAIID) under the NBR filed a case against Httpool Bangladesh for non-payment of VAT and for not operating from the address it had used while obtaining VAT registration.

Later, Httpool paid Tk 77.62 lakh VAT for July in late August and Tk 1.55 lakh as fine, said Khan.

"Now Facebook is complying with the rule. It even cleared the August's payment before the deadline."

According to the rules, companies should clear VAT of a month by the 15th day of the next month.

The NBR is also trying to collect VAT from another tech giant Google.

"We are in touch with the Bangladesh Telecommunication Regulatory Commission so that Google comes under the VAT law properly," Khan added.

Facebook, in June, announced that it appointed Httpool as its authorised sales partner to provide support and market expertise to local businesses and agencies and provide the option for local currency transactions.

As of June, there are more than 38 million Facebook users in Bangladesh, making the country the 10th largest in terms of audience, according to global data firm Statista.

Facebook is increasingly giving importance to the south Asian nation, as it has recently appointed Sabhanaz Rashid Diya as its public policy manager, who will look after all matters pertaining to Bangladesh.

The decision to appoint Diya was announced at a virtual meeting arranged between Facebook's regional headquarter in Singapore and Post and Telecom Minister Mustafa Jabbar earlier this month.

"Bangladesh is a key country for Facebook in South Asia and it is a priority for us to be closer to the people and businesses here," said Facebook to The Daily Star on June 22.