Bangladesh imposes tax on Facebook, YouTube ads

The government has decided to collect 15 percent value added tax or VAT from the advertisements on internet platforms like Facebook and YouTube.

The authorities have not been collecting any tax from the Bangladeshi advertisers of the virtual world until now.

The government moved recently to collect the taxes following a High Court order. The court on Apr 12 last year ordered the authorities to tax the transactions on Bangladeshi advertisements posted on Google, Facebook, YouTube and other similar websites.

In a letter to the Bangladesh Bank on Jan 22, the National Board of Revenue or NBR asked the central bank to take steps to ensure that the banks will collect tax from the Bangladeshi advertisers.

The central bank on Monday ordered all the banks to follow the NBR directives mentioned in the letter.

Bangladeshis paying royalty or fees to entities such as Facebook and YouTube outside the country for different types of internet services like advertisement must pay 15 percent VAT, according to the letter.

But NBR found some of the banks were not collecting the VAT.

“In this circumstance, it is very much necessary to cut 15 percent VAT on payments through MasterCard, Visa, TT or any other mode and submit the money to the government treasury,” the NBR said in the letter.      

Related people have long been alleging that the money paid by the Bangladeshi advertisers is going out illegally, causing huge amount of revenue loss as the government was not taxing the advertisers.