Electronic fiscal devices at stores from next fiscal year

The revenue authority plans to introduce electronic fiscal devices (EFD) from fiscal 2018-19 with the view to combating value-added tax evasion at the retail level and ensure compliance, said a senior National Board of Revenue official yesterday.

The EFDs would replace the electronic cash registers (ECRs), which the NBR made mandatory in 2008 for 11 types of businesses: hotels, restaurants, confectionaries, jewellers, beauty salons, wholesalers and large retail stores.

“This will help us to monitor transactions and get real-time data of sales at shops as the EFD machines will be connected to a server at the NBR,” the official said.

The move comes following advice from Finance Minister AMA Muhith to introduce an EFD management system to combat non-payment of VAT at the retail and wholesale levels.

Customers would be able to know if the VAT they paid went to the state coffer: they will receive a code that would be generated by the NBR's central server.

The NBR earlier planned to buy 10,000 ECRs for large shops, wholesalers, restaurants and other businesses as part of its target to implement the VAT law 2012 from fiscal 2017-18.

The plan was scrapped after the government deferred the implementation of the law by two years. Last year, it identified 8,007 entities eligible for fitting the electronic sales devices.

At present, several thousand shops use electronic cash registers and point-of-sale machines. However, not all use the device to issue sales invoices to customers in an attempt to appropriate the VAT and hide actual transaction figures from taxmen.