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Progress in the construction of elevated expressway in Dhaka.

 

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Two of the world's largest tech giants Google and Amazon have obtained their Business Identification Number (BIN) from the National Board of Revenue (NBR) – a mandatory requirement for any business operating in Bangladesh.

For the first time ever, two non-residential companies have registered for BINs in the country, and they will now pay a 15% VAT on revenue derived from Bangladesh, and submit returns on the total turnover at the end of each year.

This move will speed up the process of such companies opening their offices in Bangladesh, and clear the way for corporations like Facebook to register here as well, NBR officials told The Business Standard.

Providing more details, NBR's VAT Online project director Kazi Mostafizur Rahman said, "We issued a BIN to Google on Monday and Amazon on Thursday. They registered under the names The Google Asia-Pacific Pte Ltd and Amazon web services Inc respectively.

"We already handed over the copies of registration documents to PricewaterhouseCoopers (PwC) – which serves as consultants for both companies in Bangladesh.

Last year, Facebook Inc appointed an agent to do business in Bangladesh after facing pressure from the NBR. The company's agent Httpool has been paying VAT to the board, but Facebook still does not have a BIN in Bangladesh.

At present, Google operates in 40 countries around the world, having set up 70 offices, while Amazon has offices in 17 nations. Both the companies have local offices and entities in India, including the biggest office of Amazon in Hyderabad.

Google is well known for its popular search engine, email service, web browser, and various online tools used by billions daily at work, at home, and on the go. The bulk of Google's 181-billion-dollar revenue in 2020 came from its proprietary advertising service, Google Ads.

Included in the list of "other revenues" is income from related online, media, and cloud computing businesses such as the Play Store, Chromecast, Chromebooks, Android, Google Apps, and the Google Cloud Platform.

Amazon ranks as one of the world's top companies by market value. As of February 5, 2021, Amazon had a market cap of $1.7 trillion. The company posted net income of $21.3 billion during its 2020 Fiscal Year, which ended 31 December, 2020.

Due to the booming e-commerce sector and the fact that nearly all of the large companies are now advertising on digital media, tech giants such as Google, Amazon and Facebook are making around Tk3,000 crore from Bangladesh annually, industry insiders have said.

Advertisers are paying the tech giants with international credit cards. But there are allegations that many are using illegal channels to transfer payments, which is not compliant with the NBR regulations.

Asked how Google and Amazon will do business and pay VAT in Bangladesh after obtaining their BINs, the VAT Online project director said, "These companies already have a large business here through e-commerce, advertisements, apps, gmail and other services.

"They will continue in the same way as before, but the process will now be compliant with the regulations."

Kazi Mostafizur Rahman added, "Such companies have two options to pay their VAT. They can appoint an agent in Bangladesh to pay VAT, or they can use a Bangladesh Bank branch in another country for this process.

"A company can also make online payments to any bank in Bangladesh, and then send us the invoice, or pay us through foreign banks that have branches here."

Adding that Google and Amazon will have to submit returns on their annual turnover from now on, the NBR official said, "They can submit returns through a local consultant or online from their country.

"However, we prefer that the companies open offices here to be fully compliant with the digital platform."

The Bangladesh government in 2019 took the initiative to bring foreign companies under the registration and VAT process.

The country also made multiple failed attempts to establish an admin panel in Facebook, as the company added their terms and conditions to Bangladesh Telecommunication Regulatory Commission's (BTRC) proposals.

After much effort from Bangladesh, Facebook appointed an agent in the country in 2020.

On the other hand, Google, Amazon, Netflix and a number of other organisations have been trying to register their business in Bangladesh since 2019. Google and Amazon had contacted a Bangladeshi firm for getting their registration, but later faced complexities in the VAT law.

Eventually they backed off due to double taxation, the NBR having no process for registering non-residential companies, and having no facility for online payments.

An official of the consultation firm, on condition of anonymity, said though Google and Amazon navigated through the complexities and received their BIN, they will still have problems setting up officers in Bangladesh.

The official added, "Under the existing VAT laws, it is mandatory for any established company with a turnover of more than Tk5 crore to utilise Sales Data Controller and maintain a purchase account for submitting returns.

"But such organisations use their own global platforms and have no purchase in Bangladesh. These issues could complicate matters for them."

 

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Chittagong Port Authority to get 283.23 acres of land soon for Matarbari Port​

The Chattogram Port Authority (CPA) will get 283.23 acres of land soon for developing the Matarbari Port in a bid to enhance the cargo handling capacity of the country.

To this end, the CPA has already handed over a cheque of Tk75.11 crore to the Cox’s Bazar district administration office for the 283.23 acres of land acquired for the development project around the Matarbari seaport.

On March 10, 2020, the Executive Committee of the National Economic Council (Ecnec) approved the Matarbari Port Development Project with Tk17,777.16 crore aiming to enhance the cargo handling capacity of the country.

Of the total project cost, Tk 2,671.15 crore will come from the government, Tk 2,213.24 crore from the CPA, while the rest Tk12,892.76 crore will come from the Japan International Cooperation Agency (JICA).

The CPA under the Ministry of Shipping, and the Roads and Highways Division are implementing the Matarbari Port Development Project, which is scheduled to be completed by December 2026.

Talking to BSS, CPA Chairman Rear Admiral M Shahjahan said the main objective of the project is to enhance the cargo handling capacity of Bangladesh through constructing the Matarbari Port including link road and thus fulfil the demand of international trade as well as facilitate speedy port services with neighbouring countries.

He said the Matarbari Port would be the country’s 4th port after Chittagong, Mongla and Payra and it would be built as a huge port, in view of the growing pressure of economic activities.

“This is another dream project for the country and it will further strengthen our journey towards the ocean as well as boost our trade and commerce,” he added.

He said that the Matarbari Port would fulfil the government’s aspirations for a deep-sea port side by side creating opportunities for anchoring container-laden vessels, open goods-laden vessels and oil tankers at the port jetty.

“Besides, this port will minimize the pressure on the Chittagong Port alongside meeting the growing demand of the country’s import and export activities. Goods transportation to and from the potential industrial estates at Matarbari and Moheshkhali will also be facilitated once this port is established,” he added.

He informed that the Matarbari Port will have two separate terminals where ships with around 8,500 TEU containers could anchor as there will be an 18-meter draft at the port channel.

The main project operations include construction of a multipurpose terminal and a container terminal, procurement of necessary cargo handling equipment and construction of around 26.7km link road, he added.

 

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Complete runway expansion of Cox’s Bazar airport by next December: State Minister for Civil Aviation​

State Minister for Civil Aviation M Mahbub Ali today directed the concerned engineers and contractors to complete the runway expansion of Cox's Bazar Airport and the construction work of link-bridge over the Baagkhali River by next December.

The state minister gave the instructions while expressing satisfaction over the progress of various development works including runway expansion project at Cox's Bazar Airport and construction of tourism facilities including construction of Sheikh Hasina Tower at Khurushkul.

Various development work including strengthening the runway of the airport and increasing the runway length from 9,000 feet to 10,700 feet, installation of air field ground lighting system, installation of instrumental landing system, construction of safety wall and construction of bridge over Baagkhali river are going on currently.

Mahbub Ali said various development work is underway to make Cox's Bazar an international standard tourist destination.

"After the implementation of these development projects, domestic and foreign tourists will get various tourism facilities including easy travel to Cox's Bazar," he said.

Secretary, Civil Aviation Ministry Md. Mokammel Hossain, Chairman, Civil Aviation Authority of Bangladesh Air Vice Marshal Md. Mafidur Rahman, Additional Secretary of the Ministry Sukesh Kumar Sarkar, Member, CAAB, (Management and Planning) Air Commodore Md. Khalid Hossain, Chief Engineer, CAAB, Md Abdul Malek among others were present at the time.

 

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€12m grant financing deal signed to support power, energy sector​

The French Development Agency (AFD) and the government of Bangladesh have signed a grant financing agreement of 12 million euros or around Tk1.24 billion to support advanced digital solutions in the power and energy sector in Bangladesh.

This agreement is part of a larger multi donor project involving the joint commitment of AFD and the European Union (EU), for a total investment of €112 million.

The project, called “Power Factor Improvement and Smart Grid under Dhaka Power Development Company (DPDC) Dhaka, Bangladesh” is the first ever smart grid project in Bangladesh and will be implemented over the next 5 years, said a media release.

EU Ambassador to Bangladesh Rensje Teerink said the European Union is committed to supporting Bangladesh in adopting advanced digital solutions in power distribution, in view of a sector decarbonisation, thanks to the joint effort with one of our Member States, France.

"This project is also relevant for the Team Europe Initiative on Green Energy Transition, which involves the EU, its Member States and like-minded partners. It aims at supporting Bangladesh in its transformative, low-carbon development, through an increased use of renewable energy and energy efficiency enhancement.”

This is the first ever initiative in Bangladesh to equip the existing grid with reliable, cutting-edge new technology, allowing DPDC to optimize energy distribution without making an unnecessary additional heavy network capital investment.

AFD Country Director Benoit Chassatte, said in Bangladesh, 2020 was an opportunity to amplify existing commitments to modernize Dhaka’s power grid.

"In addition, AFD has increased its commitment in the energy and power sector in Bangladesh by financing (EUR 151.56 million) in 2020 the Infrastructure Development Company Limited (IDCOL) and the Bangladesh Infrastructure Finance Fund Limited (BIFFL), both public financial institutions specializing in the financing of infrastructure and renewable energy projects, and the promotion of green initiatives.”

Through this project, 1,141,000 people will benefit from a significant improvement in the quality of electricity service.

It will also prevent an accumulated 104,000 tons of CO2 emissions per year, thereby contributing to Bangladesh’s climate goals.

With this project, AFD and the EU are reinforcing their role in supporting the Government of Bangladesh in the search for and use of advanced digital solutions in distribution stations and in medium-voltage grids.

The goal is to equip existing infrastructure with these new, innovative and reliable technologies in order to ensure services are prepared for the future.

A core aspect of Bangladesh’s economic development strategy is an improved performance of the power sector in terms of generation, transmission, and distribution.

The smart grid in Bangladesh is in its early stages, and merely consists of deploying smart meters.

 

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