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The Financial Express

Facebook to open local office, pay taxes

| Updated: September 26, 2019 13:22:00


File Photo (Collected) File Photo (Collected)

Facebook, a popular social media site, agreed to open an office and appoint local representatives in Dhaka to pay taxes on its earnings from advertisements in the country, telecom ministry said on Monday.

The global tech giant has also agreed to share 'information' on demand from the law enforcement agencies, according to a press statement issued after a meeting between Posts and Telecommunication Minister Mustafa Jabbar and representatives of Facebook.

At the meeting, the ministry offered cooperation in the use of Bangla on Facebook and proper translation of the contents into Bangla.

The meeting was held at the Bangladesh Telecommunication and Regulatory Commission (BTRC) office in the city.

Though Facebook promised to open an office in Dhaka and pay taxes, neither BTRC nor Facebook mentioned any timeline in this regard.

Posts and Telecommunication secretary Ashok Kumar Biswas, BTRC Chairman Md Jahurul Haque, BTCL Director General Iqbal Mahmood, and Facebook representatives Ashwani Rana, Vikram Langeh, Shivnath Thakur, Varun Reddy, Sumant Viswas, Toby Farmen and Rishabh Dara were present at meeting.

A number of meetings between the two sides were also held earlier where they had discussed the issues of opening office, having control over Bangla content and sharing the revenue, but the Facebook remained non-responsive.

As per the new VAT law, which came into effect on July 1, it is mandatory for the tech giants, including Google and Youtube, to either set up offices in Bangladesh or appoint agents so that the government can collect value added tax (VAT) on the advertisements shown on their platforms by local firms.

The National Board of Revenue (NBR) took the issue very seriously and sought cooperation from the BTRC in ensuring that the three social media giants set up offices in Bangladesh.

Digital advertisements account for a lion's share of local companies' advertisement budget, but the government does not get a significant amount of VAT from the ads running on digital platforms such as Facebook.

Every year Facebook, YouTube and Google earn more than a billion taka from Bangladesh and the most part of the sum is transferred beyond the banking channel.

In February last, BTRC first asked the three tech giants to set up offices in Bangladesh, submit a report on the revenue generated from the country and ad-links accounts and provide information about payment method. But they remained silent.

As of August, there are about 98.1 million active Internet connections and 35.0 million active Facebook accounts in Bangladesh, according to the BTRC.

Currently, more than 50,000 Facebook pages are running e-commerce business and they all have to spend a huge amount on digital ads.

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