The Centre for Policy Dialogue (CPD) has recommended entirely taxing global tech firms such as Facebook and Google.
The civic society think tank made such a recommendation today at a forum titled “Taxing the Digital Economy: Trade-offs and Opportunities” in the capital. The CPD conducted the research with the assistance of the European Union (EU).
In highlighting the research’s recommendations, distinguished fellow of CPD Dr Mustafizur Rahman stated that while the government has been collecting VAT from global tech giants such as Facebook and Google, it has yet to collect income tax from these companies.
“Because, they don’t have taxpayer identification number (TIN) due to not having local offices in Bangladesh. But, the global tech giants are earning a huge amount of money every year from Bangladesh. The National Board of Revenue (NBR) should frame necessary policy to bring these companies fully under the tax net,” he added.
According to the CPD distinguished fellow, local companies give roughly Taka 2,000 crore in advertisements to global tech giants like Facebook and Google each year, but their income remains untaxed. “There is a need to impose tax against such newer services in order to increase internal resource mobilization,” he added.
Noting that there is no alternative option to increase internal resource mobilization in order to transform the country into a ‘Smart Bangladesh’ in accordance with the government’s vision, Dr Mustafizur also advised the government to progressively abandon the culture of tax exemption.
He believes that the government should launch a well-thought-out campaign to improve revenue creation through the use of digital technologies while also researching strategies to grow the digital economy.
According to the CPD distinguished fellow, if the trend of tax exemption continues year after year, it will be impossible to increase spending in sectors such as education and health.
He also proposed developing a roadmap for gradually imposing taxes on sectors that currently enjoy tax breaks.
Dr Mustafizur recommended for providing incentives to the start ups in such way so that newer sectors emerge, creating scopes for generating revenues.
Mentioning that double taxation still exists in some areas of digital economy, he said that such things should have to be addressed side by side policy support should be extended to flourish e-commerce and e-business.
Kazi Nabil, MP, and Ahsan Adekur Rahman, CPD distinguished fellow Dr Debapriya Bhattacharya, CPD executive director Dr Fahmida Khatun, BASIS director Habibullah N Karim spoke, among others, at the dialogue.
