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.
If Bangladesh can assure US citizens and investors that corruption is less prevalent here than in other markets, it will likely attract more investment, said US Ambassador Peter Haas.
“Corruption is a parasite that feeds on the resources of a society and drains it of its strength. It can devastate every level of business and government,” the ambassador said during the “Call to Action Against Corruption Summit” held at the Pan Pacific Sonargaon Hotel in Dhaka on Tuesday (21 March).
He said the United States is committed to working with Bangladesh to eliminate corruption, to enable Bangladeshi citizens to enjoy lives of dignity and inviting more international trade and foreign investment.
“We support initiatives that help Bangladeshi businesses meet international standards and regulations, making them more competitive in the global market.”
By promoting ethical business practices, a more level playing field can be created for businesses of all sizes and encourage more foreign investment, said Peter Haas.
Bangladesh has many advantages that potential investors would find attractive, he said, adding, “But as American business leaders tell me: multi-national firms have options on where they invest.”
He said those will choose whichever country has the lowest levels of corruption, the fewest bureaucratic obstacles, the greatest respect for rule of law, and the best logistics infrastructure for their business.
So, if Bangladesh can attract more investment only by assuring citizens and investors that corruption is less prevalent here than in other markets, he said.
The US Agency for International Development, USAID, has partnered with Bangladesh’s Registrar of Joint Stock Companies to launch an online registration process for new businesses. This makes registering new businesses more transparent, faster, and more affordable.
The USAID has also worked with the Bangladesh National Board of Revenue to establish Authorized Economic Operators. This has empowered the private sector, instead of the government, to release shipments at ports.
As a result, the process has become more transparent and raised the level of trust between the private sector and the government.
The US Department of Commerce’s Commercial Law Development Program (CLDP) works with the Private Public Partnership Authority Bangladesh to conduct workshops to improve the legal and business environment of Bangladesh.
The CLDP also works with Dhaka North City Corporation (DNCC) to improve municipal governance by improving fiscal transparency. Under this program, the CLDP brought a DNCC delegation, including the mayor, to Miami in January.
The US Department of Justice trains investigators and attorneys in the Anti-Corruption Commission on such topics as how to investigate and prosecute money laundering, how to use electronic evidence, and how to investigate financial crimes.
It has also fostered a relationship between Bangladesh’s Financial Intelligence Unit and the International Anti-Corruption Coordination Centre.
The United States is committed to holding corrupt officials accountable for their actions. This can take various forms, said US Ambassador Peter Haas.
Bangladesh Prime Minister Sheikh Hasina has asked all concerned to find a way out to ensure sustainable export growth and explore new global markets for Bangladeshi goods in the wake of the Russia-Ukraine war.
The Prime Minister made the call while speaking at the 11th meeting of the National Committee on Export, at her official residence Ganabhaban in Dhaka on Monday (20 March).
PM said, “Steps will have to be taken to achieve sustainable export growth after analysing situation steamed from the global economic recession due to the war in Ukraine,” she told the 11th meeting regarding export at her official Ganabhaban residence here.
The prime minister also urged all concerned to diversify the export items and explore new markets for those alongside revitalising the local markets.
“A new scope has been created globally to explore new markets for Bangladeshi items due to enhanced demands for goods because of the war in Ukraine. We have to grasp the markets,” she added.
The premier also called for formulating a new export policy for another 4 or 5 years by revising, changing and improving the existing one going to expire by 2024.
She said the new export policy should be adopted by analyzing the ongoing global economic recession, sanctions, counter-sanctions for the war and the challenges and scopes possibly to be created in Bangladesh after the graduation from the LDC by 2026.
Dhaka’s air quality continued to be in the ‘unhealthy’ zone this morning (March 20, 2023).
With an air quality index (AQI) score of 133 at 9 am, Dhaka ranked 15 on the list of cities worldwide with the worst air quality.
An AQI between 101 and 150 is considered ‘unhealthy’, particularly for sensitive groups.
Iraq’s Baghdad, Pakistan’s Lahore and South Korea’s Incheon occupied the first three spots in the list, with AQI scores of 259, 257 and 194, respectively. An AQI between 201 and 300 is said to be ‘very unhealthy’, while a reading of 301+ is considered ‘hazardous’, posing serious health risks to residents.
In Bangladesh, the AQI is based on five criteria pollutants — Particulate Matter (PM10 and PM2.5), NO2, CO, SO2 and Ozone. Dhaka has long been grappling with air pollution issues. Its air quality usually turns unhealthy in winter and improves during the monsoon.
Air pollution consistently ranks among the top risk factors for death and disability worldwide.
