Advocacy – Advertising Agencies Association of Bangladesh (AAAB)

AAAB

Advocacy

AAAB

Advocacy

July 2025

Reinstatement of 100% Tax Exemption for Advertising-ITES Sector

For years, agencies operating in the advertising-related Information Technology Enabled Services (ITES) sector faced a rigid compliance rule: both income and expenses had to be conducted entirely through banking channels in order to qualify for income tax exemption. In practice, this requirement created major operational difficulties for agencies managing vendors, production costs, and day-to-day cash transactions.
AAAB consistently raised this issue in meetings with the National Board of Revenue (NBR), submitting a pragmatic proposal that allowed for a balanced approach — ensuring transparency of income while giving agencies flexibility in handling expenditures.
In July 2025, NBR accepted AAAB’s recommendation and amended the rules: now, 100% of income must be received through banking channels, but expenses can be carried out following normal procedures, without losing the exemption.
This outcome is more than an adjustment to tax policy. It represents a significant improvement in the ease of doing business for the advertising-ITES sector, reduces unnecessary compliance burden, and supports agencies in allocating resources more efficiently for growth.

June 2025

Simplification of Foreign Currency Payments for Digital Advertising

As digital platforms became the dominant channel for advertising, Bangladeshi agencies struggled with complex foreign currency payment procedures for advertisements placed on Google, Facebook, YouTube, and other platforms. The requirement for pre-approvals from the Foreign Exchange Policy Department of Bangladesh Bank created delays, uncertainty, and administrative bottlenecks — hindering agencies’ ability to serve clients effectively in a fast-paced digital environment.
Recognising the urgency of the issue, AAAB engaged Bangladesh Bank through a series of formal representations and consultations. The Association highlighted how the restrictions were limiting industry competitiveness, slowing the growth of digital commerce, and constraining the government’s broader “Digital Bangladesh” ambitions.
In June 2025, Bangladesh Bank responded positively by issuing a new directive that eliminated the pre-approval requirement, simplifying the process for making legitimate payments to international digital platforms. This reform is a gamechanger for the sector. Agencies now have a more predictable and transparent system for managing digital advertising spends abroad. The decision not only reduces administrative hurdles but also unlocks opportunities for growth in Bangladesh’s digital economy.

May 2025

VAT Policy Reform: Relief for Agency Cash Flows

Value Added Tax (VAT) regulations had long been a source of financial strain for advertising agencies, particularly those involved in event management, production, and activation. Under the previous system, VAT deducted at vendor level (Mushok 6.6) could not be adjusted against output VAT liabilities, forcing agencies to make additional treasury deposits. This double burden tied up working capital and created serious cash flow challenges across the sector.
AAAB identified this as one of the most urgent regulatory bottlenecks and initiated an extensive advocacy campaign with the National Board of Revenue. After months of dialogue and repeated submissions, the NBR issued SRO No. 182-Laws/2025/310-Mushok on May 27, 2025, formally accepting AAAB’s proposal.
The reform allows agencies to offset vendor-level VAT deductions against their output VAT liabilities, eliminating the need for duplicate payments.
The benefits of this policy change are substantial: improved liquidity, reduced financial pressure, and greater operational efficiency for agencies of all sizes. It also demonstrates how sustained, evidence-based advocacy can directly strengthen the financial sustainability of an entire industry.