Social media and foreign satellite television channels having no offices in the country must pay value added tax (VAT) from next fiscal (FY2019-20), says a directive issued by the National Board of Revenue (NBR) on Wednesday.
The authorities last year had also imposed VAT on social media but could not realize the tax for lacking technical capability to do that.
The NBR directive says all foreign television channels such as Star Jalsha, Zee Bangla and electronic service providers including Facebook, Google, Youtube, Viber, Whatsapp and Messenger have to appoint local agents in Bangladesh as per the new VAT law.
The VAT and Supplementary Duty Act, 2012 will be effective from July 1 and the entities must pay the VAT and applicable supplementary duty, the directive says.
The NBR asked the entities to take VAT registration immediately to comply with the law.
The draft budget documents say that a 15% VAT will be applicable for the sectors, while some entities need to pay supplementary duty at different rates.
NBR Second Secretary Md Tariq Hassan said some foreign satellite televisions channels were telecast in the country and they earned huge revenue from advertisements provided by local or multinational companies.
”But these channels have not paid any VAT as yet, while our local channels pay a 15% VAT,” he told Dhaka Tribune, adding that the provision was made to eliminate the discrimination.
Besides, electronic service providers including social media were brought under VAT net with the new law, he added.
Tariq, however, said the NBR would request the information ministry and Bangladesh Telecommunication Regulatory Authority (BTRC) to ensure that the entities paid VAT.
“We would also request the two authorities concerned to stop their business in case of noncompliance,” he said.