NBR eyeing VAT from streaming platforms
Netflix and Amazon Primary have become household names found in Bangladesh as the ongoing coronavirus pandemic comes with forced persons to take shelter aware of little to do apart from watch movies.
Both of these online streaming platforms are paid services, meaning there must be a 15 per cent value-added tax on the subscription fee.
However the National Board of Revenue (NBR) has been deprived of the subscription fee, explained Syed Mushfequr Rahman, director general of the VAT Audit, Intelligence and Investigation Directorate, a department of the NBR.
The NBR department made these remarks after learning that customers in Bangladesh pay their subscription fees for these online entertainment platforms, including ZEE5, in forex.
Both Netflix and Amazon Primary, two of the world's most popular streaming services, are based in America but charge the same as $10-15 in native currency for subscribers in other areas of the world.
In Bangladesh however, all online streaming systems only accept obligations in foreign currency, forcing many customers to endorse dollars against their bank cards to create digital payments.
Based on the guidelines, VAT does apply for online streaming solutions beneath the miscellaneous category.
Banks can collect the VAT when a client fees their credit card to pay a good subscription cost before depositing the sum with the state exchequer.
"But banks cannot conduct as a result without instructions from the Bangladesh Bank," said Rahman in a letter to the central bank.
In his letter, the director general asked the central bank to direct banks to begin deducting VAT when registration fees are paid out through cards.
However, the NBR section cannot ascertain the exact amount of online streaming program subscribers in Bangladesh or just how much earnings has been lost as yet.
With 183 million paid memberships in over 190 countries, Netflix is a favorite entertainment service with a bunch of television set series, documentaries and show films to select from.
Subscribers can enjoy any movie or perhaps series from Netflix's library anytime, anywhere as long as they experience a suitable device, for instance a smartphone, and link with the internet.
Meanwhile, Amazon Prime is normally a problem of global e-commerce giant Amazon. Other than streaming services, Amazon Prime offers delivery offerings, books and more.
A good senior official of the NBR's VAT Insurance policy also said that during the past, that they had asked the BB to direct banks to acquire VAT for the order of online streaming solutions like Netflix.
