Electronic invoices would now be accepted as acknowledgement receipts for value-added tax payment to the treasury, as the National Board of Revenue edges closer to ensuring online payment of the indirect tax, the biggest source of revenue for the state.
The revenue authority said electronic notifications generated through the Integrated VAT Administration System (IVAS) software would be acceptable if those invoices, date of payment, codes of commissionerates and the amount paid match with the online system of the Office of the Controller General of Accounts (CGA).
The move will relieve businesses from visiting banks to deposit VAT to the public exchequer.
"They will be able to clear tax from anywhere. This will reduce their time and expenses," said the NBR in a notice issued on Monday.
The notification came just ahead of the launch of the e-payment facility for VAT tomorrow.
The NBR is going to open the scope for businesses to deposit the indirect tax, paid by consumers at the ultimate end, electronically -- a facility envisaged as part of the goal to fully automate the VAT system.
The government took the VAT automation initiative in 2013 to implement the VAT and Supplementary Duty Act 2012 to reduce the cost of businesses, improve compliance and increase revenue collection to enhance the capacity to finance its development and other expenditures.
Bangladesh has the lowest tax-GDP ratio, a measure of a country's capacity to fund its own expenses, in South Asia.
Since the launch of the Tk 690 crore VAT Online Project (VOP), the NBR could open online VAT registration facility and online submission of VAT returns or monthly transaction statements since October last year -- three months after the new VAT law came into effect from July.
So far, Tk 238 crore out of the total estimated cost of Tk 690 crore for the VAT improvement project has been spent. And a large chunk of the money is likely to remain unspent.
"The opening of e-payment for VAT is going to be a big step forward," said Kazi Mostafizur Rahman, director of the VOP. Initially, account holders of HSBC, Prime and Midland Bank will be able to pay VAT electronically and account holders of two more banks -- Islami Bank and Bank Asia -- will be able to do the job by the end of this month.
The Bangladesh Bank suggested these banks kick off the e-payment initiative as they are connected with the real-time gross settlement system, a funds transfer system that allows for the instantaneous transfer of money.
"We are trying to bring all banks onboard within August," he said.
Earlier, the VOP succeeded in conducting a mock-test of electronic payments of some firms through HSBC and Midland Bank. The payments were small but the results were positive.
A VAT commissioner seeking to remain unnamed said it may take time for the e-payment facility to be fully operational. "But it will have a positive impact on businesses," the official added.
Businesses have to go to banks either with cash or cheque to deposit VAT, said Md Arshed Ali, convener of the research wing of VAT Professional Forum.
"They have to stay in queue to do the job. The e-payment will provide convenience."
All banks should be brought under the e-payment system so that businesses with accounts at any financial institution could avail the opportunity, Ali said.
The initiative to open the electronic payment for VAT option for businesses follows the rollout of the online return filing window for 150,000 VAT-registered firms in October.
The responses were initially were low. But the number of online return filers has risen over time to nearly 40,000 now.
The VOP is working to start some modules this month and two more modules including VAT refund, appeal and arrears in August to complete all the functional requirement before the expiry of the project, which got extended owing to a deferral of implementation of the VAT law by the government, Rahman said.