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Saturday, October 01, 2005

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HEADLINE
 
NBR to shore up VAT revenue from wholesalers, retailers
S M Jahangir
10/1/2005
 

          The National Board of Revenue (NBR) has initiated a move to intensify the value added tax (VAT) collection drive, primarily focusing on retail and wholesale levels.
Under the fresh initiative, the revenue authority wants all the retail and wholesale traders concerned to be registered with its VAT units, official sources said.
"We have planned to bring all the retailers and wholesalers under the VAT collection network to boost revenue from the sector," a senior NBR official told the FE.
The NBR has already directed all its commissionrates to prepare detailed reports on how many traders have come under their respective collection network and submit the same to it within a month.
The latest NBR move came in the backdrop of widespread non-compliance by wholesalers and retailers with the directives relating to registration and payment of VAT.
Information suggested that nearly 75 per cent of the registered traders remained out of the VAT net.
Official sources, however, said some 11,000 out of over 47,000 registered traders paid VAT until June, 2005.
As a result, the NBR could realise VAT worth around Tk 450 million from the sectors during the last fiscal as against its collection target at about Tk 2.50 billion, another official said.
Expressing its dismay over the traders' poor response, the NBR recently sought suggestions from the apex trade body - Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) - for streamlining the VAT collection system.
Earlier, the NBR authority and the business community in a joint statement decided that individual traders would pay VAT on the basis of the sales turnover instead of the earlier self-assessment system.
Both the sides also agreed on the formation of high-profile committees, comprising representatives from business community and NBR officials to fix the amount of VAT to be paid by the individual traders.
With the decision, several committees were formed at all the national, district and regional levels to conduct the VAT fixation process in their respective areas.
But the NBR authority has found that such committees have failed to boost VAT revenue from retail and wholesale traders.
In this backdrop, the authority also informed the FBCCI about its plan to stop VAT collection through the committees following their poor performance.
The NBR wants to ensure an effective and compliance-friendly VAT collection system at retail and wholesale levels with a view to checking smuggling, under-invoicing and revenue leakage, the official said.
But the authority finds itself in a difficult situation to bring retail and wholesale trade under VAT net due to the non-cooperation from a section of business leaders.
Under the existing provision, traders are to pay VAT at the rate of 1.5 per cent as against every individual sale and the same is payable at the end of the following month, officials said.
Meanwhile, the collection of VAT by the NBR registered a 15.5 per cent rise during the first two months of the 2005-06 fiscal year over the corresponding period last fiscal, officials figures showed.
The Board realised Tk 15.13 billion as VAT during the July-August period of the current fiscal while the amount was Tk 13.11 billion during the same period of last fiscal.

 

 
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