The e-Commerce Association of Bangladesh (e-CAB) has proposed including e-commerce and online shopping in the Information Technology Enabled Services (ITES).
President of the association Shomi Kaiser made the proposal during a pre-budget discussion for the 2021-22 fiscal year with the National Board of Revenue (NBR) on Thursday.
The organisation has also proposed to take necessary steps to amend the existing law to advance the digital transformation of businesses in the country.
Online entrepreneurs collect products from micro manufacturers and suppliers in most cases and they are not subject to VAT registration, said e-CAB, adding digital business will be evident if the businesses are digitally transformed.
In this way, e-commerce will be considered a new business sector, the association said while mentioning the motive for the proposal.
NBR chairman Abu Hena Rahmatul Munim presided over the discussion at the National Board of Revenue's Segunbagicha office in the capital. Several leaders of the e-CAB also took part in the pre-budget discussion.
The e-Cab has also made 15 more proposals including defining e-commerce under Income Tax Ordinance 1984, banning e-cigarettes, cancellation of VAT on product delivery charges, cancellation of VAT on rent of E&F Commerce Office, VAT exemption on intellectual property.
In addition, their list of proposals includes VAT exemption for sales of less than Tk50 lakh annually, the advantage of paying a certain amount of VAT instead of fixing 5% VAT in e-commerce.
Shomi Kaiser said the e-commerce industry has come into focus during the Covid-19 pandemic.
"About 70-80% of new e-commerce companies and over 300 new delivery companies have been formed during this time. The e-CAB currently has about 1,500 members.
"We want to increase the tax coverage and give more revenue to the government,'' she said.
NBR Chairman Abu Hena Rammatul Munim said, "There is no need to rent a shop in the e-commerce business. It does not also need too many employees."
The NBR chairman, however, said e-commerce businesses need to be brought under discipline. "A large segment of those who are involved in this business cannot be tracked. As we are not able to bring the sector under discipline, we cannot provide you with many facilities.