The National Board of Revenue (NBR) has decided to launch a door-to-door campaign aimed at improving Value Added Tax (VAT) collection, as the revenue inflow from this sector looks to be “unsatisfactory”.
According to data provided by the NBR, VAT collection up until October stood at Tk 41,192 crore, falling short of the target of Tk 51,904 crore.
While briefing reporters recently, NBR Chairman Md Abdur Rahman Khan revealed that VAT collection reached Tk 45,831 crore by November and he was not happy with that.
As part of its efforts, the Awami League government has set an ambitious VAT collection target of Tk 1,59,100 crore for the 2024-25 fiscal year.
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According to NBR high officials, the NBR chief has already directed the field-level officials to work utmost sincerity and integrity to improve the VAT collection, which is now the biggest source of revenue collection for the country.
The NBR chairman urged businesspeople who have not paid their pending VAT or registered for VAT to come forward and settle their dues promptly, emphasising the importance of taking quick action to avoid further complications.
“We are going to start a door-to-door campaign,” he said, directing the field-level officials to take necessary preparations for the campaign.
The NBR has decided to install Electronic Fiscal Devices (EFDs) across the country, including Dhaka, Chattogram, and other major cities, in an effort to prevent VAT evasion.
EFDs are an improved version of the Electronic Cash Register (ECR) imported by the NBR. When used in business, VAT payments are automatically transferred to the NBR's main server, eliminating the possibility of hiding sales data.
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This system ensures that daily transaction information is directly sent to the NBR server, which helps reduce fraud, according to NBR sources.
To enhance revenue collection in various retail and wholesale businesses, the state-of-the-art electronic fiscal device system was introduced during the 2020-21 fiscal year. The goal was to track transactions and ensure accurate VAT collection from 25 different business types. The government is currently in the process of outsourcing the installation of these devices and ensuring the programme's continued operation.
Officials from the NBR's VAT department said that substantial amounts of VAT are evaded at the retail and wholesale levels.
They believe that bringing all retail and wholesale businesses under the machine system will boost revenue generation.
In 2008, the NBR made e-cash registers mandatory for 11 business types, including hotels, restaurants, confectioneries, jewellers, beauty salons, wholesalers, and large retail stores. However, the results of that decision did not meet expectations.
Many businesses reportedly continued to evade VAT by not using the e-cash registers in collusion with field officials of the revenue authority.