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18 February, 2020 02:51:59 AM
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Delays in installation of EFD blamed for sluggish revenue

Kaniz Fatima, Dhaka
Delays in installation of EFD blamed for sluggish revenue

A government initiative to increase revenues by enacting the VAT and Supplementary Duty (SD) Act, 2012, did not materialise as conceived because of several changes in the new Act and delays in the installation of electronic fiscal devices (EFDs), said experts.

The experts also warned that unless EFDs are installed, it would not be possible to curb the tendency towards tax evasion and boost revenue collection.

The National Board of Revenue (NBR) has not yet installed EFDs at shops for ensuring automated collection of value-added tax (VAT).

“Without EFDs, it would not be possible to curb the tendency towards tax evasion. Customers pay the tax but in most of the cases, these are not deposited with the national exchequer,” Zahid Hussain, former lead economist of the World Bank (WB), Bangladesh, told The Independent.

“Unless EFDs are set up and properly monitored, VAT evasion will not cease,” Hussain added. “It is also necessary to make people aware about their VAT submissions. Otherwise, there is scope to evade the payment of VAT collected from consumers,” he warned.

The collection of tax revenues by the National Board of Revenue (NBR) fell short of the target by 23.05 per cent or Tk. 315.08 billion in the first half (H1) of this fiscal year (FY) 2019–20.

When asked about the possible deadline to begin installation of EFDs, NBR member (VAT implementation and IT) Jamal Hossain on Sunday said it is in the final stages. “The board will hold a meeting on February 19 and take a decision on this,” he added.

“We’re hopeful that the installation work will begin very soon,” Hossain told The Independent. He, however, said it is a wrong idea that VAT collection will increase overnight after the installation of EFDs. “Nothing happens overnight. It will take time to derive benefits from it,” he added.

“The new Act proposes to bring significant changes in the earlier VAT rules and regulations to increase the revenue earnings but on account of several changes in the Act, the way to increase revenue collection has been stopped,” Zahid Hussain added.

Earlier, the NBR missed the deadline to begin installation of EFDs at 25 types of shops in January. It had previously missed the December deadline.

 Fahmida Khatun, the Executive Director of Central for Policy Dialogue (CPD), said it is necessary to make businesses aware about the new VAT Act.

“Most of the small businesses do not know about the new Act,” she said.

“ Many business establishments in our country do not give receipts for purchases of goods or services in our country. As a result, the government is being deprived of VAT payments. So it is necessary to force businesses to submit VAT through installation of EFDs,” said Dr AB Mirza Azizul Islam, a former adviser to a caretaker government.

The installation of EFDs at shops for automated VAT collection is very essential for ensuring VAT collection, he said. “It is one of the major administrative weaknesses of the NBR that it has so far not been able to install electronic fiscal devices at shops and customised software at large businesses,” Azizul Islam added.

Meanwhile, state-run news agency BSS yesterday reported 100 state-of-the- art technology-based Electronic Fiscal Devices (EFDs) would be installed at some 100 business enterprises in March.

Jamal Hossain said the revenue board at the beginning of the current fiscal year had declared to install EFDs.

“But, it was not possible to launch it on time since the work on setting up data center under the VAT online project could not be completed. But, now all the preparatory works are at the final stage and hopefully it will be possible to launch those machines next month,” he added.

An EFD can maintain the accounts of businesses and automatically count VAT. The NBR, on June 13, issued a statutory regulatory order (SRO) asking 25 types of business sales points to mandatorily use this device from the current fiscal year to accurately maintain the transactions and VAT collection records. According to the SRO, any business entity having annual turnover of more than Tk 50,00,000 must set up EFD software at its outlet(s).

EA

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Editor : M. Shamsur Rahman

Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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