Simple, low VAT rate will increase collection: Experts

Al Amin :
The National Board of Revenue (NBR) fails to bring Value-Added Tax (VAT), , evaders under surveillance due to the lack of skilled manpower and technologies.
According to the NBR data, some 143 businesses under the Largest Taxpayer Unit (LTU) are paying over 57 per cent of the total VAT every year. Businesses mostly of cigarettes, mobiles, soft drinks, medicines, cement, banks, ceramics, toilet soaps and natural gas sectors, are paying VAT as per law.
On the other hand, there are more than 15 lakh VAT-eligible business entities across the country.
Some of the business entities collected VAT from the consumers, but do not deposit to the government exchequer as there is no strong surveillance resulting the government is losing crores of revenue every year.
The number of registered VAT-paying entities was around eight lakh in the manual system. Of them, only 30-32 thousand entities would submit VAT returns.
Currently, Online VAT registration is mandatory and according to the latest data of the NBR, around 231,000 companies
 
 have taken online VAT registration till February this year. Of the registered companies, only 96,000 entities have filed VAT returns so far.
Ahsan H Mansur, Executive Director of Policy Research Institute (PRI), told The New Nation, “There are more than 1.5 million VAT-eligible business entities in the country. Many of these entities did not take VAT registration very tactfully to stay out of the NBR’s scrutiny.”
“Many of them are not paying VAT, despite having VAT registration due to proper surveillance,” he added.
He further said that the number of businesses, who are collecting VAT and depositing it in the government treasury, is limited.
Helal Uddin, President of Bangladesh Shop Owners Association, said, “There are more than 22 lakh shops registered with our organization across the country. We are ready to use EFD machines but the NBR has installed the EFD machines only several thousand shops across the country.”
If the EFD machine is installed in every outlet, VAT collection will increase, he added.
Rizwan Rahman, President of the Dhaka Chamber of Commerce and Industry (DCCI), said that along with enhancement of VAT net, a simple and business-friendly VAT system needs to be introduced.
He also said NBR should fix annual turnover limit four instead of three crore and impose VAT as per annual profit turnover.
Besides, exemption VAT at source after paying 15 per cent VAT needs to be introduced in the service sector, he added.
Dr A B Mirza Azizul Islam, former adviser to the caretaker government, said, “A balanced VAT system needs to be introduced across the country. The VAT collection will increase if all the business entities outside the VAT net are able to be monitored.”
The VAT receipts grew 2.26 per cent year-on-year to Tk 51,422 crore in the July-January period of the current fiscal year, in line with the pace gained in economic and business activities, according to the NBR data.