New deadline for setting up sales registers would be in budget speech

It's been almost three years since the revenue authority decided to set up the electronic fiscal device (EFD), a sales register, at shops to monitor the transactions to curb the scope of evasion of value-added tax, the biggest source of revenue for the state coffer.

Now, the National Board of Revenue (NBR) says it is ready but the pandemic has emerged as a new stumbling block for its installation.

The plan was to set up the devices in February and launch it marking the Mujib Year, said Md Jamal Hossain, member for VAT implementation at the NBR.

The Mujib Year runs from March 17 this year to March 26 next year to celebrate the birth centenary of the Father of the Nation.

But the plan was put on hold for the outbreak of coronavirus in Bangladesh in March.

Now, the NBR has to play a waiting game for when the situation becomes normal to install the devices,

he said.

The board first decided to enforce its rule on the use of electronic cash registers (ECR) by the relatively larger shops in 2008. But the move fell through amid poor compliance and enforcement by field offices of VAT.

One of the major shortcomings behind the failure of the ECR venture was that the NBR had no server connected to the ECRs at the retail level to ensure that sales receipts were issued through the devices and records were not erased.

The revenue authority later decided to provide EFDs and sales data controllers (SDCs) to 25 types of businesses, including shops, hotels, restaurants, sweets stores, clothing, furniture and electronics outlets and jewellers.

The EFDs and SDCs will be connected to a central server at the NBR and generate real-time data of sales, reducing the scope for evasion -- which is rampant.

The NBR approved the purchase 100,000 EFDs for Tk 316 crore at the beginning of this fiscal year from a consortium of Shenzhen-based SZZT Electronics and local Synesis IT.

The consortium was initially asked to supply 10,000 EFDs and has already brought 3,000 EFDs.

The devices are ready for installation, said Iqbal Hasan Ferdous, general manager of Synesis IT.

"We can supply and install the devices at shops if the NBR directs us," he said, adding that the data centre is ready while software installation has been complete.

End-to-end testing has been done too, he said.

It was planned that 100 EFDs would be piloted in selected stores and businesses mainly in Dhaka to see the results before rolling out the scheme.

And some training and awareness programmes were also conducted among businesses, according to revenue officials.

But the question is whether it is the right time to approach shop operators to set up the devices when their business nose-dived and cash flow has been nil for nearly two months because of the countrywide general shutdown put in place since March 26 to slow the spread of the deadly virus.

"Businesses are suffering. We should consider their issues. Would it be wise to bother a business that is closed now?" Hossain said.

There is likely to be a disclosure about the timeframe on the installation of EFDs in the finance minister's budget speech for next fiscal year.

"We will set up the device within the Mujib Year," he said.