E-Commerce Association Bangladesh (eCAB) today demanded withdrawal of the VAT on digital commerce.

“We will be raising our demand for full withdrawal of the VAT in the sector for at next least five years,” said Abdul Wahed Tomal, general secretary of eCAB.

Even though Commerce Minister Tipu Munshi and State Minister for ICT Zunaid Ahmed Palak demanded complete withdrawal of the proposed 7.5 per cent VAT on the online shopping in the national budget for 2019-20 fiscal, it said.

If any company purchases any product by Tk 100 and it sells in exchange of Tk 105, then the applicable VAT will be charged five per cent on the additional Tk five that means the VAT will be Tk 0.25, said the eCAB.

He said most of the e-commerce companies use to subsidise to their products and services and thus it will create a new challenge to the entrepreneurs.