The National Board of Revenue (NBR) has launched a fresh drive to boost collection of value added tax (VAT) at retail and wholesale levels.
Under the move, the revenue authority has formed several taskforces to intensify the filed-level collection drive in major divisional cities, especially in Dhaka and Chittagong, official sources said.
The taskforces will monitor the transactions of important shopping outlets and trade centres belonging to service sectors, food and sweetmeat shops, hotels, jewellery shops and other departmental stores, and realise VAT on the basis of their average turnovers.
The main objective of the step is to bring maximum number of retail and wholesale traders under the VAT net, a senior NBR official told the FE.
"Our current drive aims to beef up VAT collection from the retail and wholesale levels as the government's revenue collection from the sector is still poor," said the official.
Despite repeated warnings by the authorities, a vast majority of such traders are not complying with the existing VAT payment provisions.
Currently, the NBR is able to collect VAT amounting to Tk 300 million to Tk 400 million from retail and wholesale levels annually, while the amount could be as high as Tk 2.50 billion or more.
Official figures revealed that nearly 75 per cent of the registered traders remained out of the VAT net as some 12,000 out of over 47,000 registered traders were paying the tax.
Under the existing provision, traders are to pay VAT at the rate of 1.5 per cent as against every sale and the amount is payable at the end of the month, officials said.
Expressing dismay over VAT-dodging tendencies by a large number of traders, 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 turnovers instead of the earlier self-assessment system.
Besides, several committees were also formed at national, district and regional levels for fixation of VAT to be paid by individual traders in their respective areas.
Later, the NBR authority found that formation of such committees yielded little result in boosting revenue.
Against this backdrop, the revenue authority informed the FBCCI about its plan to stop VAT collection through those committees following their 'unsatisfactory' performance.
The NBR wants to ensure an effective and compliance-friendly VAT collection system at retail and wholesale levels to check smuggling, under-invoicing and revenue leakage, the official said.
Meanwhile, the collection of VAT during the July-February period of the current fiscal recorded a 20.32 per cent rise over the corresponding period last fiscal.
The NBR collected VAT amounting to Tk 66.95 billion in the first two quarters of 2005-06 fiscal compared to Tk 55.64 billion during the same time last fiscal, official figures showed.