The government will continue to carry out a number of reforms in NBR revenue management in the next fiscal year in a bid to raise revenue income to the expected level.
For proper implementation of VAT Law that came into effect from July 2019, necessary manpower, equipment and logistics will be provided to NBR and its skills will be enhanced.
Some 85 per cent of government revenue is collected through the National Board of Revenue (NBR). In FY22, a target has been set to collect Tk 3.3 trillion tax revenues through the NBR.
“Necessary steps will be taken to build institutional capacity of the NBR, and priority will be given to the tasks of business process automation in the next fiscal year,” AHM Mustafa Kamal said in his budget speech.
Although a large section of our population can afford to pay taxes, the number of taxpayers is 25.43 lakh at present.
Emphasis will be given next fiscal to bring them under the tax net by taking necessary steps to prevent tax evasion. Moreover, the issue of low Tax-GDP ratio will be addressed with some timely measures, Kamal said.
He also hopes to implement the new Customs Act in the next fiscal year once the National Parliament approves it to stop tax dodging and capital flight apart from making duty structure timely.
Kamal said practical measures have been taken to provide easy and seamless services to the taxpayers, businessmen and citizen through automation and digitalisation of income tax, VAT and customs departments under the NBR.
As part of the reforms, e-payment services have been initiated through the establishment of necessary interfaces with the Bangladesh Bank for online payment of taxes.
Now, the taxpayers can pay their taxes from home at their convenient time through their own bank accounts without physical presence at the premises of Bangladesh Bank or the Sonali Bank.
Keeping the prevailing circumstances in mind, the government seeks to bring the taxpayers under the tax net through reforms in tax systems, expansion of tax scope and motivating the taxpayers and all e-TIN holders to submit their annual tax returns voluntarily.
The Income Tax Departments have already taken steps for the return submission of non-filer companies. NBR and the Institute of Chartered Accountants of Bangladesh (ICAB) have jointly introduced Document Verification System (DVS) to determine the authenticity of the audited statements of accounts submitted by the taxpayer companies.
Kamal expected that this initiative will bring transparency in the disclosed income of the companies. An activity regarding system integration between NBR and Bangladesh Road Transport Authority is going on for exchange of information, pulling and storing of data and checking the authenticity of stored information.
“We hope that this initiative will be helpful in the identification of new taxpayers and prevention of tax evasions,” Kamal said.
E-TDS system has also been introduced for monitoring tax deduction and collection.
Steps have been taken so that the taxpayers can submit their annual income tax return online from next year.
Kamal informed that automated online registration is a mentionable achievement of the VAT Law. So far, more than two lac taxpayers have received 13 digits registration number online.
To make the registration system more dynamic and reliable, activities are going on for establishing interfaces with the Registrar of Joint Stock Companies and Firms, Office of the Chief Controller of Imports and Exports, National Identification Card authority, City Corporations and Commercial Banks.
The VAT Online Project is working for bringing transparency in VAT collection and establishing an ICT based VAT administration system. This initiative has resulted in the submission of about 70 per cent online VAT return so far.
In order to ensure easy, transparent and hassle-free VAT collection, from August 2020, The NBR has started installing EFD (Electronic Fiscal Device) or SDC (Sales Data Controller). 3,000 EFDs or SDCs have been installed in business establishments in Dhaka city so far under this project.
To make this initiative 100 per cent effective, the consumers are being rewarded through lottery on EFDMS issued invoices every month. “We are hopeful that the general consumers will make this project successful.”
Though there is a section on reforms in the budget document, it only refers to what has been done so far. It does not spell out what concrete reforms would be undertaken to improve the efficiency in the economy, the Centre for Policy Dialogue (CPD) alleged at a post-budget reaction.
These ongoing NBR modernisation projects would have been fully implemented by now. There should have been deadlines set for their full operationalisation in the budget, it observed.
As of now, about 3,000 EFDs or SDCs have been installed. NBR plans to install another 7,000 machines by June 2022.
This will cover only 3.9 per cent of business entities that have received online VAT registration. CPD had drawn attention to the need for a faster installation of these for expansion of the VAT-net.