International Digital Media Buying has swept the media landscape in our country for some time now as a massive chunk of Bangladeshi users flock in sites like Facebook and Google to share, search, and take action. This has led to an influx of brands placing themselves in front of those users on these platforms. In turn, international digital media buying has taken off in Bangladesh for brands and e-commerce/f-commerce companies alike. However, things have less than par when it comes to ethical business practices that also comply with the laws of the land.

When brands/e-commerce companies purchase digital advertisement inventory from these two platforms (or any international platform for that matter), the procurement is said to be done in an internationally accepted currency like that of the United States Dollar (USD). Right now, a significant chunk of payment is made to these platforms using methods like credit cards issued in Bangladesh, credit cards issued internationally, PayPal, and bank accounts opened outside the territories of Bangladesh.


This Gives Rise To A Serious Problem: A Financial Crime Called Money Laundering. How? Let me try to explain.

The brands/companies operating in Bangladesh and selling products and services to Bangladeshi people are making revenues primarily in Bangladeshi Taka (BDT). However, whenever they are paying the platforms like Google and Facebook from overseas using credit cards issued internationally, PayPal, and bank accounts opened outside the territories of Bangladesh, they are essentially making payments in USD. This mismatch of revenue-expenditure currency would not probably have been an issue had the relevant taxes were paid to the applicable tax and foreign exchange regulatory authorities under due permission.

Bangladesh is said to be country without “capital account convertibility”, meaning that international currencies can come into Bangladesh freely as inward remittances through legal channels but the same cannot be remitted outside the country without case-by-case-basis approval from the foreign exchange regulator Bangladesh Bank. In such cases, the tax regulator National Board of Revenue (NBR) is also a stakeholder since almost any transaction will have some kind of tax implication.

Now, it has been postulated that almost 70 percent of the international digital media buying is done through channels that give rise to practices that fall under the definition of money laundering. Some brands are opting for such financial crime practices due to lack of knowledge whereby some others are doing it simply to avoid relevant VAT and TAX. It is noteworthy that for every dollar spent in an international digital media buying platform like those of Facebook and Google, a VAT of 15% and a Tax Deducted at Source (TDS) on the non-resident income of 20% are applicable as per the Finance Act 2019.

On this note, over the years, we have come to realize that there is a serious lack of understanding regarding the compliance and the possible ramifications of non-compliance of this matter across the board among both the brand/marketing teams and accounts/finance teams of Bangladeshi companies. It has been alleged that intentionally or unintentionally, Bangladeshi brands/companies have been evading income tax and value-added tax (VAT) worth millions of dollars over the past several years by not following the proper rules, regulations, and documentation requirements. This issue is so serious that it was discussed even in the National Parliament and the Criminal Investigations Department (CID) also got involved and question businessmen. Authorities like the National Board of Revenue (NBR) and the Bangladesh Bank have issued several circulars and letters in this regard. Several ministers also questioned the nature of how these advertisements are being placed without ensuring the collection of tax deducted at source and value-added tax. Practices like paying using credit cards without proper tax and VAT deduction and paying using offshore accounts etc. tantamount to illegal financial activities like tax evasion and may even fall within the jurisdiction of money laundering as mentioned before in this article.

Now, as a responsible, ethical, and compliant agency, since its very inception, GEEKY Social has made it a point to be compliant in these kinds of international digital media buying practices. The Company has worked with clients in the past to enable their systems and processes to follow the steps necessary to make them compliant because violation of this can raise serious financial and reputational consequences for brands which, in turn, may hurt the industry’s reputation also. This article is, therefore, part of an initiative by GEEKY Social Limited called “International Media Buying Compliance Awareness Initiative (IMBCAI)” to raise awareness regarding this ultra-sensitive matter that threatens to undermine ethical and legal business practices. We would like to urge every brand manager and business owner to do business in the country to follow proper, compliant best practices especially when it comes to international digital media buying, i.e., running ads on Facebook and Google, etc. There are proper systems and processes in place promulgated by the government that we all need to know and implement as a matter of ensuring compliant business practices and help the advertising industry and the country as a whole.


Written by

Md Saimum Hossain, CFA

The author is the Cofounder and Head of Business of GEEKY Social Limited, a Facebook Agency Directory enlisted digital-first advertising agency. He can be reached at [email protected]

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