Bangladesh reverses plan to impose VAT on online shopping

The government has reversed a plan to impose 5 percent VAT on online shopping.

Online shopping VAT draws flak

The VAT on online shopping as announced in the new budget was a printing error, according to the National Board of Revenue.

“It was printed mistakenly. We dropped the decision,” said Md Mosharraf Hossain Bhuiyan, chairman of the NBR, responding to a question at a post-budget news conference in Dhaka on Friday.

According to Finance Minister AMA Muhith’s budget speech delivered on Thursday, 5 percent VAT was levied on online shopping.

Muhith has also proposed 5 percent VAT on digital ride-sharing service providers such as Uber and Pathao, which promoted criticism from users. 

Whether it will put pressure on the middle income class, Muhith angrily said: “Poverty is declining at a faster rate in Bangladesh. People are now capable of paying taxes.”