To sell foreign digital items such as games, e-book, music, research and data, software programs, and paid applications on e-commerce marketplaces, merchants will need to procure these from foreign sources and follow the existing regulations by paying applicable duties, taxes, and other excises.
The Foreign Exchange Policy Department (FEPD) of the central bank on Thursday issued a circular in this regard citing that the sales of such digital items are being carried out by merchants through e-commerce marketplaces or platforms.
As per the central bank, the sales of such digital goods or services to the local people against payments in local currency violates the Foreign Exchange Regulation Act 1947 that states, payments against the procurement for commercial trading from external sources have to be made as outward remittance through banking channel under general authorization.
The central bank in the circular stated digital items purchased under individual or corporate entitlements of foreign exchange cannot be placed at e-commerce marketplaces and online platforms for sales and customers’ due diligence needs to be observed along with anti-money laundering (AML) or combating the financing of terrorism (CFT) provisions, prior to enlisting merchants on those platforms.
Bangladesh Bank hence instructed authorized dealers to guide their e-commerce customers for meticulous compliance in accordance with the aforementioned stipulations.
However, speaking to Dhaka Tribune Syed Almas Kabir stated: “If the recharge/top-up cards are purchased through the legal banking channel which is remitting forex legally, I see no problem in letting them be traded in local currency. The government can impose VAT on this as well. When an individual pays the subscription of Netflix with a bank card, a VAT is added by the bank. So, if someone wants to buy the subscriptions (recharge cards) in bulk, pay the VAT, and resell them, I don’t see why it would not be allowed.”
“Please remember, in-app purchases, buying software licenses online, etc should be allowed without any hassle. Otherwise, people will make these purchases through the grey channel,” he further explained.
The president of the Bangladesh Association of Software and Information Services (BASIS) also urged the central bank to ease the forex regulations for the easy flow of cross-border digital commerce, citing: “They need to look at the bigger picture.”
Another consumer who purchases such digital items told Dhaka Tribune: “If I cannot buy like these locally, I usually ask my foreign relatives to purchase the gift or e-card for me, which they buy from their respective location and give me the code to redeem it. If we are forced to take such measures for consuming such digital items, then isn’t there a chance of the local stakeholders missing out on revenue?”
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