Small stores to slip out of taxman

Gradually all businesses will have to use electronic cash registers.Photo: SK Enamul Haq

Next time you visit the local department store, keep your ears open for curious jingles of typing noises coming from the cash counter.
That is the noise of an electronic cash register at work. And that is a noise city dwellers should get acquainted with because the tax department hopes every store in the city will introduce these registers gradually.
"This is probably one of the biggest changes in the retail scene of the city," said Hamidur Rahman, a clerk at the counter of a bookstore in Dhanmondi.
"A large number of businessmen can now enjoy the ease of using a electronic cash register to keep track of daily transactions. But I doubt a lot of the small stores out there would be able to afford an electronic cash register," he said.
After around two years of procrastination, the use of cash register was made mandatory from January 1 this year at restaurants, sweetmeat stores, fast food outlets, grocery shops, beauty salons, furniture shops, community centres, departmental and general stores to keep track of all their transactions.
It all started a couple years back when the authorities were trying to find a way to net the huge amount of taxes and VAT many businesses were not paying.
And they came up with the idea of introducing electronic cash registers to streamline the recording of the flow of transactions.
“Many shop owners tend to deceive VAT officers by using different logbooks with the manual bookkeeping system,” said an official from the National Board of Revenue (NBR).
“When VAT inspectors go to inspect the VAT information, they present a logbook that has the least amount of sales. This way they dodge taxes,” he said.
Originally scheduled to go into effect from July 2008, enforcement of the policy was delayed to give the shop owners an extra six months to comply to ensure collection of value added tax (VAT) from the retailers, NBR sources said.
"The shop owners complained that the new policy is being enforced without considering their inconveniences," an NBR official said.
Over two thousand businesses have already started using electronic cash registers in the city, unofficial source said.
According to sources at NBR, gradually all businesses will be brought under the use of electronic cash registers.
While many stores seem to have electronic cash registers, this correspondent found many stores using manual bookkeeping methods as their cash registers stay idle at the counter.
"The technology is quite new to us. We need time to get used to it. That is why we are still using papers to record our sales," said Golam Hossain, counter clerk at a popular kebab place on Bailey Road.
Some retailers are not even aware of the new scheme. Most of them do not have the slightest knowledge about electronic cash registers.
“Could you give me any idea on where to get a cash register, or which one would be more cost effective?” asked a visibly baffled Shankar Chandra Dash, proprietor of a stationary store in Banani after this correspondent informed him about the new scheme.
“I think it would be more convenient to use an electronic cash register rather than the manual bookkeeping system. However, I really do not know about the functions of a cash register or where to get one,” said Shankar.
Many storeowners believe a good number of businessmen still may not be able to afford electronic cash registers.
“A decent cash register comes at a price of around Tk 40,000 to Tk 50,000. We have to cough up at least Tk 20,000 for even a lower quality register. So they authorities should consider that there are a huge number of small businessmen who can not afford it,” said Abul Hasnat, owner of a restaurant in Uttara.
“It should not be made mandatory for small retail outlets,” he suggested.
However, NBR officials believe that the retailers had sufficient time to get hold of a cash register. “I do not see how they cannot spend Tk 20,000 on it. It sounds reasonable in terms of the money they make,” said an NBR official.