Tax Compliance and Evasion in Facebook-Based Commerce in Bangladesh: Evidence from Facebook-Based Businesses with Lessons from Formal E-Commerce and International Platform Regulation

The rapid expansion of Facebook-based commerce (F-commerce) has transformed the digital business landscape in Bangladesh by enabling small entrepreneurs to participate in online trade with minimal capital and infrastructure. While formal e-commerce platforms operate under increasing regulatory and tax oversight, F-commerce continues to function largely outside the formal tax system. This study examines tax compliance and evasion in Bangladesh’s digital economy with a primary focus on F-commerce, using formal e-commerce platforms as reference cases and drawing policy lessons from international experiences, particularly China and Malaysia. The study is based on a review of existing empirical studies and policy documents, supplemented by primary data collected from a survey of 110 Facebook commerce buyers and interviews with eight Facebook-based sellers. The findings suggest that widespread non-registration, undocumented transactions, reliance on cash-on-delivery and mobile payments, limited tax knowledge, and weak enforcement visibility collectively contribute to persistent informality in F-commerce. The study argues that tax evasion in F-commerce is largely driven by systemic and behavioural barriers rather than deliberate intent. By integrating the Theory of Planned Behaviour with platform-based regulatory perspectives, the paper proposes policy directions aimed at improving tax compliance while preserving the inclusive and entrepreneurial potential of F-commerce in Bangladesh.while preserving the inclusive and entrepreneurial potential of F-commerce in Bangladesh.