Economists’ body recommends bringing digital economy under tax net

The government needs to urgently design a comprehensive framework to bring Bangladesh’s fast-growing digital economy under the tax net to boost the country’s tax-to-GDP ratio, the Bangladesh Economic Association (BEA) said.

It warned that a large and expanding segment of income remains outside the formal revenue system.

The association placed the recommendation before the National Board of Revenue (NBR) during a pre-budget discussion at its headquarters in Dhaka.

The economists’ body said sectors such as e-commerce, freelancing, digital advertising, and streaming services are growing rapidly but remain either fully or partially untaxed. This includes Facebook-based businesses, sellers on platforms like Daraz, freelancers on global marketplaces, and users paying for services such as Netflix and Spotify.

According to the BEA, the lack of a structured taxation regime is causing revenue losses and creating an uneven playing field between compliant businesses and largely untaxed digital operators.

It also flagged rising cross-border digital transactions, noting that firms like Google, Meta Platforms, and Amazon earn significantly from Bangladesh but contribute limited taxes.

The BEA proposed mandatory tax registration for foreign digital service providers and an automated withholding system through payment gateways to deduct tax or VAT at source.

It also recommended forming a specialised digital unit within the NBR to monitor cross-border transactions in real time, improve compliance, and reduce revenue leakages.

Prof Mahbub Ullah, convener of the BEA, and Mohammad Masud Alam, member of the committee, spoke at the event presided over by Md Abdur Rahman Khan, chairman of the NBR.