VAT automation to take six more months
The National Board of Revenue (NBR) has extended the tenure of the much talked about VAT system automation project by six months to June 2021 as most of its modules are yet to be completed.
The revenue authority said only three modules -- VAT registration, returns and e-payment -- have been prepared so far while development of seven or eight modules would be complete by this month or the next.
The project has 16 modules in total.
"We expect all the modules will be complete within six months," said NBR Chairman M Abu Hena Md Rahmatul Muneem in response to queries during a press briefing at the NBR headquarters yesterday.
The Tk 690 crore project, a majority of which will be financed by World Bank, was scheduled to end this month following a two-year extension in 2018 owing to the deferment of the VAT and supplementary duty act.
The revenue authority organised the meet to share the results of programmes it held to observe VAT Week between December 10 and December 15, which were focused on motivating businesses and consumers to use electronic fiscal devices (EFD), a kind of cash register, to increase revenue collection.
As a part of the event, the NBR will recognise the country's top nine VAT paying firms in order to encourage others to collect and deposit in the state coffer the consumption tax paid by the consumers.
Muneem said more than 1,000 EFDs have already been installed in Dhaka and Chattogram and the NBR would gradually bring stores across the country under the EFD network.
To encourage people to pay VAT and ask shops for receipts against their purchases, the revenue authority launched a lottery, offering Tk 100,000 as the first prize.
"We have posted the list of shops that are already using EFDs so that shoppers can visit them to take part in the lottery. We will hold the lottery on a monthly basis," he said.
The NBR chief, replying to a query on the VAT Online Project (VOP), said the contractor, Vietnam-based FPT Information System, would continue with the job during the extended period of the project.
The government took up the VOP in 2013 to implement the new VAT law by automating the VAT system and replacing a more than two-decade old VAT law.
The idea was also to reduce the cost of business, improve compliance and increase revenue collection in the country, which has the lowest tax-GDP ratio in South Asia.
Initially, the NBR planned to start with a uniform 15 per cent VAT rate on all goods and services, moving away from multiple VAT rates.
The enforcement was delayed on several occasions for a lack of preparedness of the revenue administration and opposition from businesses, particularly the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI).
The VOP officials said the project's tenure extension was required as activities under the VOP remained almost suspended for two years because of delays in the implementation of certain laws and a two-month general holiday aimed at curbing the spread of Covid-19 within Bangladesh.
The lockdown began on March 26 and eventually came to an end on May 30.
Around Tk 200 crore will likely to be left unspent under the VOP as some of the planned components have been made redundant for amendments brought to the VAT law, the officials said.
As of November, Tk 256 crore had been spent on the project, they added.