E-Commerce Entrepreneurs Echo Opposition to Proposed VAT

Members of the e-Commerce Association of Bangladesh (e-CAB) have called for the withdrawal of the proposed 15% Value Added Tax (VAT) on online sales commissions in the upcoming 2025–26 fiscal year.

The demand was raised at a budget review event held on Tuesday, June 3, at the e-CAB office in Dhanmondi, Dhaka. As the association currently lacks an elected executive committee, the event was organized by general members in the presence of the appointed administrator, Muhammad Said Ali, to present their reactions to the proposed national budget.

Several prominent entrepreneurs and business leaders spoke at the event, including A H M Hasinul Quddus (Rusho), Chief Corporate Affairs Officer of Daraz Bangladesh; Jannatul Haque (Shapla), owner of Azure Cuisine; Mohammad Shahab Uddin from Diabetes Store Limited; Zia Ashraf, Co-founder and COO of Chaldal.com; S M Nurun Nabi of Bikroy Bazar Dotcom; Sheikh Shafayat Hossain, Chairman of ePiker Extensive Limited; Md. Saiful Islam, owner of Amar Gadget; Engr. Touhida Haider, CEO of Mensen Media; M M Rayhana Begum of Top Trendz; Najibullah Rafe of Adamya Prokash; Abu Sufiyan Nilav Bhuiyan of Nijol Creative; Kamrul Islam of Snow n’ Rain; Kazi Mukituzzaman of Top More; Moynul Hossain of Furnicom; and Ismail Hussain of BD Exclusive.

Speaking at the event, Administrator Said Ali remarked, "The demand by e-CAB members to withdraw the proposed VAT is logical. I also believe that the government has proposed this VAT on online sales commissions as a revenue-generating measure. However, it may result in decreased rather than increased revenue, as many small entrepreneurs will not be able to continue their businesses under such tax pressure. This will lead to rising unemployment, forcing the government to spend more on subsidies for the unemployed."

He added, "Reducing the VAT on online sales commissions to zero could potentially increase revenue. As businesses grow, the government will have more avenues to generate revenue from the sector."

Before his remarks, various e-commerce entrepreneurs voiced their concerns and demands, which the administrator assured would be formally communicated to the relevant government authorities.

Zia Ashraf of Chaldal.com stated, "Running a business under a 15% VAT regime will be difficult. To encourage the growth of the e-commerce sector, it must be kept VAT-free."

He continued, "There was a major expectation of digital inclusion in the new Bangladesh. The e-commerce sector can play a vital role in fulfilling that expectation. I believe the sector should be granted a 2% subsidy for proper development."

Antu Karim, Managing Director of Paikari Limited BD, added, "Without proper support, the e-commerce sector will not be able to stand on its own. For B2B businesses like ours, the 15% VAT will be a significant burden. This will increase product prices and place pressure on consumers, eventually discouraging online shopping."

A H M Hasinul Quddus (Rusho) of Daraz Bangladesh pointed out, "Our analysis shows that applying 15% VAT on sales commissions will cause the retail price of many products to be higher online than in physical stores. In some cases, prices will approach the maximum retail price threshold."

Jannatul Haque (Shapla) of Azure Cuisine added, "Online shopping saves time. Higher VAT means higher costs for products. We want the cost of living to go down and time to be saved for the public."

Moynul Hossain of Furnicom remarked, "With such high VAT, manufacturers won’t be able to sell on marketplaces. Small entrepreneurs will turn away from e-commerce."

Ismail Hussain of BD Exclusive noted, "To promote the e-commerce sector, we already pay VAT in two stages for social media advertising. This issue also requires a logical solution."