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Internet service providers (ISPs) have sought steps from the government to resolve the issue of double taxation in providing advertisements to Google, facebook and other social media platforms.
Banks deduct 15 per cent VAT at the time of repatriating earnings of the global technological giants from Bangladesh, and service-seekers also have to pay 15 per cent VAT against advertisement bills of the companies.
The Internet Service Providers Association of Bangladesh (ISPAB) recently urged the National Board of Revenue (NBR) to consider VAT rebate for all types of online advertisements.
The ISPs said now they have to pay 32.5 per cent VAT to avail services from Google, facebook and other social media.
Earlier, the Bangladesh Bank (BB) recommended the NBR to resolve the double taxation issue.
However, the NBR found it difficult to waive VAT on one end due to lack of database on sources of earning of the non-resident companies.
Talking to the FE on Wednesday, ISPAB President Md Emdadul Hoque said the service providers are supposed to get refund of the 15 per cent VAT.
But most of the advertisement providers cannot claim it, as payments are made through credit cards or different online medium, he added.
In a recent proposal, the ISPAB also demanded to exempt tax on ISP revenues and employee wages until 2030. The service providers also requested to consider the ISPs as IT-enabled services to enjoy tax exemption until 2024.
The organisation also requested to cut tax to 5.0 per cent against import of ISP equipment, such as - router, switch, OLT, ONU, and fibre optic cable, etc.
"The ISPs are continuously importing equipment to provide service to their clients. These imported equipment are not for sale, but used to augment service of the clients," the ISPAB proposal said.
The association leaders said in addition to data and internet, the ISPs are providing many value added services, like - VPN, MPLS, IPSEC, video conferencing, and other IT-related services.
The ISPs are working for ensuring low price internet, and have already introduced 'Ek desh ek rate' tariff for all users all over the country. Tax exemption would help them to offer lower prices.
The ISPAB president said duty rate of router and switch is still high, which is a barrier to flourish the ICT industry.
Once tax on dial-up modem tax was above 40 per cent, which was cut to 5.0 per cent to facilitate users. Now, ONU has replaced dial-up modem, but the tax on it is still about 40 to 50 per cent, he added.
The ISPAB has some 1,700 members, having tax and VAT registration numbers.