The government is eyeing to generate revenue from online video streaming sites like Netflix, Amazon Prime, Zee5, and others as the channels are getting huge popularity in the country.
However, as the channels do not have local agents in the country, the government is not getting VAT or TAX against the customer subscription fees of these foreign channels.
In this regard, the National Board of Revenue has asked Bangladesh Bank to take action. The Director General of VAT Intelligence said that they are working together with Bangladesh Bank and BTRC to cut 15 percent Vat from subscribers local and international cards while paying monthly, quarterly, and yearly subscription fees.
Director General of VAT Audit, Intelligence and Investigation Directorate, Dr Moinul Khan said, "We are working closely with Bangladesh Bank and have given them a letter. We will inform you of our progress very soon."
"Transactions through international cards are a big challenge for us, because we can't track and don't get any money from there. We are talking to BTRC and Bangladesh Bank to monitor foreign cards. We are optimistic that jointly we will be able to come up with a solution," he added.
While talking about the local agents of these channels, he said, they are trying to communicate with these online channel authorities to appoint local agents so that they can be informed about their payment method and transaction.
"If payment is made through local banks it can be easily identified, but it will not be possible to deduct VAT from those using international cards," Moinul said. He stressed on making it mandatory that all online service providers appoint agents in the country to prevent VAT evasion.
Customers have to pay a prescribed subscription fee for these foreign online based channels to get all kinds of entertainment. This leaves a huge amount of money out of the country without any VAT.
The minimum subscription fee for Netflix in the country is US$ 6 per month. According to the law, a 15 percent VAT is supposed to be deducted for each subscription, but for a long time, customers have been taking this service online without paying VAT.
According to VAT intelligence sources, 15 percent VAT was levied on the bills of online streaming sites in the current financial year. But it was not realized as no instructions were given to the commercial banks. The central bank has directed all commercial banks to deduct VAT in the wake of the VAT detective's letter.
Banks have informed the customers who have availed the service and paid their bills through credit cards about Vat. As a result, from now on the customer will have to pay VAT. Netflix's minimum subscriber fee is US$ 6 per month which is equivalent to Tk 680 (per dollar Tk 85).