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NBR chairman: E-commerce businesses won’t come under VAT net

  • Published at 05:05 pm June 8th, 2018
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National Board of Revenue (NBR) chairman Md. Mosharraf Hossain Bhuiyan said the budgetary provision to impose 5%-Value Added Tax on e-commerce businesses was a “printing mistake.”

There will be no VAT on e-commerce businesses, he confirmed during a post-budget press conference at Osmani Memorial Auditorium in Dhaka.

“We have initiated a process to bring virtual businesses like Facebook, YouTube, and Google under tax net. But we are not considering bringing e-commerce businesses within VAT bracket,” said Mosharraf Hossain.

During the national budget proposal address in the parliament on Thursday, Finance Minister AMA Muhith said the government has planned to impose a 5% VAT (value-added tax) on e-commerce businesses.


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“Due to information and communication technology, digital and virtual businesses are replacing conventional businesses. In order to keep pace with these changes, we need radical reform in our tax system.”

He further said: “With the rapid development of internet technology, social media and mobile application platforms, virtual businesses are booming.”

“In order to bring these online-based virtual businesses within the tax net, a new service code has been defined as ‘Virtual Business’ - on which 5% VAT shall be imposed.”

This is Muhith’s second proposal to impose VAT on e-commerce. Earlier, in his budget speech for fiscal year 2015-16, he had proposed a 4% VAT on the sector, which was later cancelled due to strong opposition from stakeholders.