A Contradictory Proposal

“This is a contradictory proposal,” Md Shafiul Islam, acting president of the Federation of Bangladesh Chambers of Commerce and Industry, said at a seminar on e-commerce at The Daily Star Centre.

The government’s decision to levy a 4% tax on e-commerce in stark contrast to the spirit of “Digital Bangladesh”. Since coming into power, the government has encouraged and promoted the digitalization of Bangladesh – ushering in internet access for millions and, in turn, revolutionizing e-commerce.

“Give the e-commerce entrepreneurs some time and they will pay 10 percent taxes instead of 4 percent. They will give the government a better chance to make the country digital,” continued Mr. Islam.

Viewing e-trade as a casualty of NBR’s income target, acting President Shameem Ahsan said the proposed VAT would put the entire sector in a bad position and give the foreign e-trade players unintended benefits as they would be exempt from paying VAT.

“At present, the yearly e-business sector size is about Tk 100 crore, and if VAT and different charges are forced the volume will recoil, regardless of the possibility that the administration proceeds with the proposed VAT, it will just gather Tk 4-5 crore, which is not a major entirety for the legislature but rather can possibly obliterate the business,” BASIS e-Commerce Alliance said at the event.

Fayaz Taher, co-founder of SDAsia, also present, praised the event as “an effective policy advocacy meeting thanks to the presence of key stakeholders. The digital VAT should be removed to grow the industry.”

Sarwar Alam, a previous president of BASIS, advocated governmental support for Bangladesh’s e-commerce scene so that it may grow stronger and better.

Fida Haq, CEO of Shurjomukhi, a main programming creator, said if the proposed VAT is put into action, it will make for some hazy areas in the sector, which will eventually prompt an underground market.

“In order to avoid paying VAT on e-purchases, customers will choose to pay cash on delivery, and reverting from e-payments to cash” Haq included.

Khandakar Ali Kamran Al Zahir, delegate executive of Bangladesh Bank, said it is exceptionally terrible that e-trade is being punished.

Most of the speakers seemed to agree that the government, in the event that this 4% tax is levied on e-businesses, would see very little revenue. The general view seems to be that e-businesses should be rewarded for stimulating the economy since 2009, not penalized with a new that can’t even be fairly applied.

SD Asia Desk