The Bangladesh Economic Association has called for reform of tax policy on digital services to prevent money laundering through cross-border transactions and to increase revenue collection from international digital platforms such as ChatGPT, Google, Meta, and Facebook.
The proposal was presented by Professor Mohammad Masud Alam, a member of the association’s convening committee, at a pre-budget discussion held at the National Board of Revenue (NBR) on 28 April, Tuesday. Leaders of various economic organizations were also present at the meeting.
Mohammad Masud Alam said that taxes should be imposed on cross-border transactions and that the base of digital taxation needs to be expanded. At present, various services from Google, Meta, Facebook, and ChatGPT are regularly being purchased from Bangladesh, but the domestic revenue structure is not benefiting accordingly.
Citing an example, he said that when purchasing a service from ChatGPT while residing in Bangladesh, tax is being paid abroad, whereas the Bangladesh government receives no tax from the same transaction. In his view, the tax structure could be determined by analyzing how many users in Bangladesh are subscribing to such premium digital services.
He further said that initiatives must be taken to bring major technology companies, including Google, under the tax net. Even on a small scale initially, taxation on cross-border digital transactions could be introduced. He also noted that there is currently no effective taxation system for various transactions on Facebook, streaming services, and other digital services.
The pre-budget discussion also emphasized the modernization of tax administration, coordination between monetary and fiscal policies, and the creation of an investment-friendly environment.
At the same time, the Bangladesh Economic Association noted that a significant amount of potential revenue is generated from rental housing in the country, much of which remains an invisible tax base. In most cases, rental income is transacted in cash and thus falls outside the scope of taxable income.
According to the association’s proposal, all rental agreements could be made subject to mandatory digital registration, utility connections such as electricity and gas could be linked to national identity cards upon tenant changes, and tax deduction at source could be introduced for rents above a certain threshold.
However, the organization noted that the biggest challenge in collecting taxes from rental housing is not economic but political. A large portion of high-value urban housing is controlled by influential individuals and business groups. Therefore, beyond administrative directives, effective taxation in this sector will require politically committed revenue reforms.
DBTech/SH/EK/OR
