Facebook, Google, Youtube to come under tax net

Facebook, Google, Youtube to come under tax net

Dhaka, June 7 (Just News): The national budget for the upcoming fiscal year 2018-19 has proposed to bring virtual platforms and ride sharing services under income tax deduction at source and value-added tax.

Finance minister Abul Maal Abdul Muhith on Thursday in his budget speech proposed new provisions in tax laws regarding taxation of virtual and digital sectors such as Facebook, Google, Youtube on their income earned in Bangladesh.

Finance Bill-18 also proposed to impose source tax on income of individuals or companies derived through providing motor vehicles for ride sharing service like Uber and Pathao.

Tax at source at the rate of 3 per cent for income below Tk 24 lakh and 4 per cent for income above Tk 25 lakh will be deducted while making payment to the motor vehicle owners.

Motor vehicle providers for the ride sharing service must obtain 12-digit electronic taxpayers’ identification number and file income tax returns, according to the Finance Bill-2018.

Besides, VAT wing of the National Board of Revenue on Thursday through a clarification said that VAT at the rate of 5 per cent would be applicable on commission which the ride service providers get through providing the service.

Income of drivers of the service, however, is exempted from VAT.

NBR officials said that income of any digital platforms like Google, Facebook and Youtube derived from sale of any goods and services by any electronic means to purchasers in Bangladesh would come under income tax.

Currently, advance income tax at a rate of 10 to 12 per cent and VAT at the rate of 15 per cent is applicable on the advertisement bills or digital marketing that Bangladeshi companies pay to the digital social media like Google, Facebook, You Tube and other similar companies.

Muhith in his budget speech said that the volume and the nature of cross border transactions significantly changed with economic globalisation and virtual plus digital economy.

Many foreign entities are making income in Bangladesh through virtual and digital transactions, but the country is not getting adequate tax from them.