NBR to roll out VAT e-payment pilot from June
The National Board of Revenue plans to introduce e-payment for value-added tax on a pilot basis from June to automate the VAT system and administration, ease the hassles faced by businesses and reduce the time and the cost of compliance.
"We will place a proposal to the higher-ups in this regard after Eid," said Kazi Mostafizur Rahman, project director of the VAT Online Project of the NBR.
The plan to proceed with the VAT e-payment comes after the project 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, Rahman said.
"We are ready and now we are planning to go big," he added.
Some 100 companies with accounts with the two banks would be brought under the piloting of digital payment of VAT as per plans.
Once the e-payment starts, businesses will be able to pay VAT without visiting banks and the VAT offices will get a copy of the payment electronically.
The initiative to open the electronic payment for VAT option for businesses follows the launch 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 overtime: from 3,000 to more than 34,000 in February.
The number dropped to 28,000 in March because of the coronavirus pandemic.
The tally of online return filers rose in April to 32,000, reflecting that firms are showing increasing interest in settling VAT matters electronically.
Once the e-payment facility is completed, 40 per cent of the total functions of the automation of the VAT system and administration would be done, Rahman said.
"Still a lot of things such as VAT refund remains to be done," he said, adding that all the remaining tasks would be complete by September.
The government took the VAT online project in 2014 to implement the VAT and Supplementary Duty Act 2012 through the automation of VAT administration, ending manual system and more than two-decade-old VAT laws.
The idea was to reduce the cost of businesses, improve compliance and increase revenue collection in the country, which has the lowest tax-GDP ratio in South Asia.
Initially, the NBR had planned to go with a uniform 15 per cent VAT rate on all goods and services.
However, in the face of opposition from business, the government had delayed the implementation of the new law several times since it was originally scheduled to roll out in July 2015. The law finally came into effect from July last year.
The revenue authority also backpedalled from introducing uniform VAT rates, delaying the implementation of the project, especially for two years from 2016 to 2018.
Registration and return modules were developed based on the original law and these modules had to be changed after the revision in the new VAT law, Rahman said.
The Tk 690-crore VAT Online Project, with a majority of the financing coming from the World Bank, is slated to end on December 31.
Until recently, Tk 235 crore of the project has been spent, according to Rahman.
Comments