Tax dodging by Google, Facebook is ‘unfortunate’: HC

The High Court says it is “unfortunate” that global tech giants Google, Facebook, YouTube, Yahoo and Amazon are not paying taxes.

The top court said these companies must pay all revenues, including tax at source and VAT on transactions for advertisement, domain sale, licence and other fees. “It is a fair debt to the people of the country.”

The court made the observation in the full text of a verdict instructing the authorities to collect “all types of tax” from Google, Facebook, YouTube, Yahoo, Amazon and other internet-based companies.

Following a writ petition, Justice Md Ashraful Kamal and Justice Razik-Al-Jalil delivered the verdict in November 2020, which was published on the Supreme Court’s website on Thursday.

The Value Added Tax and Supplementary Duty Act 2012 makes VAT registration mandatory for these internet-based companies. The companies must also pay tax returns under the Income Tax Ordinance 1984, the court said.

Citing media reports and other articles published by the Bangladesh Telecommunication Regulatory Commission, the National Board of Revenue, private mobile operators, the court said, “It is clear that these internet-based platforms are not paying any kind of revenue to the government, including VAT, turnover tax, supplementary duty and VAT and income tax as per Section 15 of the Income Tax Ordinance of 1984. It is unlawful.”

“In a country where people pay income taxes, failure to collect tax from such tech giants is unfortunate.”

With the number of internet users swelling across the country, entrepreneurs of all kinds are leaning towards advertisements on social media and the e-commerce sector is growing.

The observation came at a time when the government is struggling to bring discipline to the e-commerce sector embroiled in frauds and embezzlements.

Tax dodging by global companies and their sizeable income from Bangladesh was brought to the court’s attention three years ago.

In April 2018, the court ordered the authorities to tax the transactions on Bangladeshi advertisements posted on Google, Facebook, YouTube and other similar websites.

Justice Md Moinul Islam Chowdhury and Justice Md Ashraful Kamal issued an order and a rule in 2018 following a writ petition by six lawyers.

The move came amid calls for monitoring the outflow of money through the advertisements on Google, Facebook and YouTube.