Economy
After tax evasion, Foodpanda now charged for depriving delivery staff
Foodpanda, an online food and grocery delivery platform owned by Berlin-based Delivery Hero, has been charged with a number of problems – from VAT evasion to supplying substandard foods and depriving delivery staff of their due benefits.
Foodpanda collects food and grocery items from around 5,000 restaurants and stores and delivers products to the doorsteps of consumers through riders or delivery workers across the country under an agreement of sharing commission.
Riders, consumers and insiders of Foodpanda have recently shared their bitter experiences.
“Pulling a rickshaw is better than a Foodpanda job,” a rider said to describe how hard work he has to do throughout the week against very poor pay.
Another delivery man said Foodpanda gives him less when a customer gives some tips. Allah blesses the people in the head office,” he says.
“Foodpanda should be sued as it doesn’t fix basic salary for riders,” said a worker.
Just recently, its riders went on a strike in Dhaka, Rajshahi and Sylhet states on an 8-point demand including increasing delivery rates and other benefits. They said they ensured food deliveries defying all adverse situations but the authorities have been denying them rightful demands over the years.
This is not the end of the complaints against Foodpanda. The food and grocery delivery platform is facing numerous complaints from customers because of providing deficient foods and dilly-dallying in refunding the money in case of order cancellation.
Additionally, Foodpanda was charged with overcharging and on September 11, last month the Directorate of National Consumers’ Rights Protection fined the platform in this connection.
Dodges VAT concealing actual sales
The VAT Intelligence Directorate, in October 2020 conducted a drive at Foodpanda’s head office in Gulshan, where they found evidence of evasion of Tk3.4 crore in Value Added Tax (VAT).
A VAT evasion case was filed against Foodpanda Bangladesh Limited by the directorate and the case is still pending.
During the drive, VAT Intelligence authorities smell that Foodpanda has been doing business since 2013 by registering under Code S-099.10, which does not apply to their type of business.
The company was doing it in order to gain the facility of 0pc VAT on rent, the directorate added.
Foodpanda delivers food by using an electronic network (online platform). The code for these sorts of services is S-099.60. According to the law, they were supposed to pay 5pc VAT on the business and 15pc VAT on rent.
During the raid, sales data of Tk27.58 crore was discovered in a computer for the period of July 2019 to January 2020 and April 2020. But Foodpanda only disclosed sales data of Tk15.65 crore during this period.
The VAT directorate also discovered that in 8 months only the company concealed sales data of Tk11.93 crore from the government.
Foodpanda helps restaurants evade VAT
It receives orders through online-based apps like Pathao Food, Sohoj Food and others and delivers them to the doorsteps of the customers. They are supposed to ensure that the government gets due VAT against the sales. But that was not the case.
Foodpanda did not maintain the actual sales data and it does not provide the details in its VAT return statement, according to the VAT intelligence agency.
Hence, the food supply stores also do not show the sales information that comes from the apps in their VAT returns. By doing so Foodpanda is helping hotels and restaurants evade VAT.
“We have recently visited some restaurants from where Foodpanda gets food. We have found that the government is deprived of due VAT,” said an NBR authority.
The NBR has already started verifying electronic fiscal device information of at least 318 hotels and restaurants that supply food to Foodpanda for its customers.
It has already found VAT dodging evidence against Burger Express, Kaderia Cafe, Street Oven, Cheese Restaurant, Ghost House and Pizza King, according to the authority.
Apart from this, the Dhaka North VAT Commissionerate is investigating whether these hotels and restaurants are evading VAT in collaboration with Foodpanda, Pathao Food, Sohoj Food and other online food service providers.
The overall situation could be worrying for Foodpanda, which claims to be Asia’s largest food delivery company, as it is having a tough time in several other Asian countries, including Myanmar, Thailand, and Hong Kong.
After several phone calls and text messages, Ambareen Reza, co-founder and CEO of Foodpanda Bangladesh, replied in a message that one of her relatives survived a heart attack and she could not comment anything now.
Expatriate Bangladeshis sent approximately US$ 2.11 billion in remittances during the first 28 days of September in the fiscal year 2024-25, according to data released by Bangladesh Bank on 29 September.
Of this total, state-owned and specialised banks handled $679.10 million, while private banks received $1.43 billion in remittances.
Chief Adviser to Bangladesh’s interim government, Professor Muhammad Yunus, has vowed to expedite reforms and hold elections swiftly. Yunus, who recently assumed the role after the collapse of Prime Minister Sheikh Hasina’s 15-year administration, expressed his commitment during an interview with Tokyo-based news outlet NHK WORLD in New York on Sunday. He was attending the United Nations General Assembly at the time.
Following mass student-led protests that ended Hasina’s long-standing rule in August, Yunus stepped in as the leader of the caretaker government. Known for founding Grameen Bank, an institution providing microloans to the underprivileged, Yunus, along with the bank, earned the Nobel Peace Prize in 2006 for his efforts in poverty alleviation.
During the interview, Yunus emphasized that the interim government’s primary mission is to implement reforms promptly and ensure elections are held as soon as the groundwork is complete. He underscored the importance of success, stating, “Failure is not something that we can accept.”
Addressing the pivotal role of students in the ousting of the Hasina administration, Yunus acknowledged the sacrifices made by young people, referring to their involvement as part of a “revolution.” He highlighted his intention to engage the younger generation in shaping policy.
Furthermore, Yunus called for continued support from Japan, Bangladesh’s largest donor, during this crucial transition period. He stressed that Japan’s assistance is vital to stabilizing Bangladesh’s economy and fostering a democratic foundation in the nation.
Syeda Rizwana Hasan, the Adviser for Environment, Forests, and Climate Change, announced today that steps will be taken to restrict the use of polythene shopping bags to safeguard future generations.
Starting from October 1, polythene bags will be banned in shopping malls, followed by a ban in kitchen markets from November 1.
“Everyone must take responsibility and stop using polythene voluntarily. Action against polythene producers will begin from November 1,” Rizwana Hasan stated during a seminar.
The Department of Environment (DoE) organized the seminar to raise public awareness about alternatives to banned polythene bags.
Rizwana Hasan highlighted that the restriction on polythene will be executed in phases according to legal provisions, and discussions with shopping centers and store owners are ongoing to ensure a smooth transition.
She also announced plans to make the government secretariat a plastic-free zone by December.
Other speakers at the seminar included Environment Secretary Dr. Farhina Ahmed, DoE Director General Dr. Abdul Hamid, Director Rajinara Begum, President of the Shop Owners Association Muhammad Helal Uddin, and Md. Arifur Rahman Bhuiyan, Assistant Professor of Environmental Science at BUP. They discussed the harmful effects of polythene and the need for alternative products.
Earlier, Rizwana Hasan inaugurated a fair showcasing eco-friendly alternatives to polythene bags and visited 24 stalls. The fair featured products from government and private entrepreneurs, including reusable bags, jute bags, paper bags, and items made from bamboo and cane.
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