The National Board of Revenue plans to persuade all large and medium stores to install electronic cash registers (ECRs) in an effort to curb dodging of value-added tax on retail sales.
Along the way NBR is launching a spot survey activity on shops and other business establishments for the first time in a bid to bring eligible entities under value-added tax net and enhance revenue collection from the sector. The survey teams will also detect the shops eligible to install electronic cash register or point of sale machines for maintaining sales records accurately.
The NBR took the initiative against the backdrop of prevalent trends of VAT evasion by the traders across the country. VAT paying traders frequently allege that they face uneven competition in business as most of the shops, despite being situated in a certain area and doing same types of business, do not pay VAT. Traders usually evade VAT in two ways — either not collecting the tax from the consumers or not depositing tax to the government exchequer after collecting from the consumers.
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NBR officials will seek cooperation from shop representatives to identify large and medium stores to implement the rules framed in 2008, which made it mandatory for 11 types of businesses to use the electronic cash register devices by the next year.
The businesses include stores, restaurants, sweets shops, beauty parlours and community centres.
The move came after Finance Minister AMA Muhith asked the NBR to ensure the use of electronic devices in shops so that VAT paid by customers reaches the state coffers, a senior official of NBR said.
NBR has identified about 61,000 stores in Dhaka as eligible for setting up ECRs. However, after the initial months of enforcement, the revenue officials’ efforts lost steam.
There are some 5,000 ECRs or points of sales (POS) in the capital, but officials say proper enforcement by the NBR’s field offices would lead to faster installation of the devices and help curb tax evasion.
As per the latest initiative, the field offices of NBR will form panels with representatives of shop owners to update the list of eligible businesses, according to a decision taken at a meeting at the NBR last week.
The initiative came six months ahead of the implementation of the new VAT law in July next year.
Shops that have an annual turnover above Tk 30 lakh will have to pay 4 percent VAT once the new law comes into effect, said SA Quader Keron, chairman of Bangladesh Shop Owners Association.
ECRs will allow businesses to pay VAT according to their sales, and reduce the scope for harassment and corruption, he said. The large stores will get ECRs first, Keron said.
All ECRs can later be connected to the NBR’s automated VAT collection system once it becomes operational, said Rezaul Hasan, project director of VAT Online Project.
Source TheDailyStar
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