Taxation of e-commerce

A developing enigma

The growing trend of online shopping has brought a lot of new business opportunities to the enthusiast youths. Online business or e-commerce has expanded in Bangladesh at a tremendous rate and it is expected that the volume of e-commerce will cross Tk 10,000 crore by the end of this year as the government is providing policy support and enhancing facilities in this regard. 

Moreover, a large young population, and high rate of internet penetration have made Bangladesh a potential market for global e-commerce giants in recent years.

Considering this, it can be said that e-commerce sector can be one of the largest tax-collecting areas. But unfortunately, authorities concerned have not been able to establish any infrastructure system to collect revenue from online business sector. Hence, it is high time to build a highly skilled ICT wing in order to collect revenues from the ICT firms or services.

Government should formulate and implement new 

taxation law for  e-commerce which will more clearly 

define the parameters of this  flourishing industry

Reportedly, currently the number of members of the organisation is over ten thousand. Reportedly, more than 5 lakh people are currently employed in e-commerce services in Bangladesh. 

Experts assert that as part of country’s digitalisation, business, trade and services are mostly going online. Low coverage of internet services in the countryside was a barrier for ICT based trade and commerce. But the government’s several initiatives to expand bandwidth coverage through launching of 4G network and installing Bangabandhu-1 Satellite has removed such hindrance.

It needs no emphasising that in order to collect revenue from the ICT service based business firms NBR has to bring some necessary changes in its existing VAT rules. Firstly, NBR has to identify the challenges and barriers in the area.

As the revenue authority has no infrastructure in place to collect revenue from this area, they must build necessary infrastructure to collect revenues from e-commerce sector. 

In this regard, the revenue board will need a highly skilled ICT wing aiming to collect revenues from the ICT firms or services. Also the government should formulate and implement new taxation law for e-commerce which will more clearly define the parameters of the e-commerce industry.