Document verification system rolled out

The Institute of Chartered Accountants of Bangladesh (ICAB), in association with the National Board of Revenue, yesterday launched a document verification system (DVS) to help hunt down tax-evaders.

The ICAB developed the DVS, which is a piece of software that aims to prevent unruly firms from submitting falsified or multiple audited financial statements to the NBR.

And so, tax officials will be able to use the DVS from next month to verify whether an audit report submitted to the NBR is authentic.

The ICAB and the NBR signed a memorandum of understanding to launch the DVS at the Pan Pacific Sonargaon Dhaka Hotel yesterday.

Addressing the programme, Finance Minister AHM Mostafa Kamal said that chartered accountants are the masters of a country's accounting profession and play an extensive role in its development.

He called upon local accountants to maintain transparency and accountability in discharging their professional responsibilities. The DVS will help boost revenue collection as well, Kamal added after inaugurating the software's launch at the gala event.

Abu Hena Md Rahmatul Muneem, chairman of the NBR, said this was the beginning of a new chapter in bringing financial discipline to the country while increasing revenue.

He believes the DVS will ensure accountability in audits and would be effective in eliminating unfair means of submitting tax returns.

Muneem also said that the software will bring discipline in financial management and increase corporate tax collection.

Through this software, data from NBR's database will be compared with ICAB's DVS database.

Institutions whose audit reports and information are not available in the DVS database will be under scrutiny.

The number of companies registered with the Registrar of Joint Stock Companies and Firms (RJSC) is 176,000, of which 78,000 hold TIN certificates while more than half do not file income tax returns, the NBR chairman said. 

According to the ICAB, some companies are resorting to unauthentic audit reports, which the NBR has been so far unable to identify.

Through DVS though, tax officials will now be able to verify the audit reports submitted with tax returns.

Highlighting the practical aspects of the DVS, he said that this system is a joint effort of the ICAB and the NBR.

And as such, the ICAB and the NBR will run a joint campaign to make everyone understand its usefulness.

The Bangladesh Securities and Exchange Commission, the RJSC, Bangladesh Bank, the Insurance Regulatory and Development Authority (IDRA) and many other organisations could benefit from the use of the software.

The NBR chairman further said that the DVS would play a positive role in increasing revenue collection while maintaining the accuracy of audit reports.

"As a result, it will be possible to reduce the tax burden on the real taxpayers," he added.

ICAB President Muhammad Farooq said chartered accountants not only play a leading role in business, but also contribute to compliance with appropriate standards while performing audits.

Chattered accountants ensure a company's compliance with relevant laws and regulations in a country so that the government can earn extended revenue from the corporate sector.

Also, companies registered with the RJSC are bound to be audited by chartered accountant firms. However, there is a mismatch between the data of the NBR and the ICAB with the data of the RJSC, Farooq added.

There is an inconsistency between the number of tax returns submitted to the RJSC and the number of corporate TIN-holders. There is also a huge gap in the number of tax returns submitted to the NBR and the companies audited by CA firms. 

"To curb these malpractices, the implementation of the DVS can be a fruitful way forward," he said.

According to the ICAB, the DVS will help restore order in the entire financial sector. As a result, corporate tax collection is expected to increase heavily.

Banks, other financial institutions and regulatory bodies, including the Bangladesh Securities and Exchange Commission, will be able to use this database.

Md. Alamgir Hossain, member (tax policy) of the NBR; Md. Habibur Rahman, additional secretary (budget-1) of the finance ministry; ICAB members council and past presidents Md. Humayun Kabir, Kamrul Abedin, Adeeb Hossain Khan; and Sabbir Ahmed, member of ICAB Taskforce on DVS and vice president, also spoke at the event.

Mohammed Forkan Uddin, convenor of the ICAB DVS taskforce and vice president, and Gopal Chandra Ghosh, council member, jointly made a presentation on the DVS.