As Facebook did not have an office in Bangladesh, the National Board of Revenue (NBR) appointed Httpool as an agent to collect VAT on advertisements on the social media platform from local companies.

However, Httpool has not paid any VAT to the NBR since it was appointed in May. The company has even stopped its activities at the address given to the NBR.

The NBR came to know that Httpool had received 198 advertisements and invoices worth Tk6.22 crore from 31 companies.

After raiding the company's office on Thursday, the NBR's VAT Audit and Intelligence Department filed a case against Httpool for violating several sections of the VAT Act, including not submitting VAT returns and changing offices.

Director General of VAT Intelligence Moinul Khan told The Business Standard, "VAT detectives raided Httpool's office following a complaint and found no activity or existence of the company at the registered location. According to the VAT law, if you want to change office location, you have to inform the VAT office."

He said, "According to the registration with the NBR, the address was used as Shah Ali Tower, 11th floor, 33 Kawran Bazar, Dhaka. Its BIN is 002748360203. Apart from not running the office, it has not filed any return yet after being registered three months ago. According to the VAT law, it is mandatory to file a return every month."

According to the investigation of VAT detectives, the local Facebook agent has already collected advertisements worth Tk6.22 crore in 198 invoices from 31 companies. They have deducted VAT of Tk 93.32 lakh at the rate of 15 percent.

The lawsuit was filed because there was a risk that the deducted money would not be deposited in the government treasury, for not submitting the monthly return, and for nonexistence in the given address without approval.

The case has been sent to the Dhaka South VAT Commissionerate for disposal, VAT detective authorities said.

The online advertising market is around Tk2,000 crore, half of which is done by Facebook. There are currently 3.5 crores Facebook users in Bangladesh, which will be 10 crores in 2021.

Apart from Facebook, a total of 41 companies have been hired as agents to collect VAT from other foreign online platforms including Google, YouTube, Twitter and WhatsApp.