Not ECRs or EFDs but people are to blame

FE Team | Published: December 13, 2023 20:10:47

The country's National Board of Revenue (NBR) has never been known for attainment of enough efficiency for collection of revenues ---direct or indirect. There has always been many a slip between the cup and the lip. It has gone for the easy-way-out option ---value-added tax (VAT) that is, because of its failure to bring a reasonable or high proportion of taxable citizens under its tax net. Any hope of doing this particular job well and creditably has often been thwarted by its own indecision, a lack of proper planning and also by the non-cooperation of business outlets. A report carried in this newspaper on Tuesday last has shown how the initiatives of the NBR has suffered from its inherent weaknesses and also how many retailers have foiled the NBR move to collect VAT through automated devices.
Actually the genesis of the NBR dilemma over installation of the right kind of automated devices goes to electronic cash register made mandatory for shops of 11 categories in 2009. The plan dropped in 2019 was replaced by a fresh one for installation of electronic fiscal devices (EFDs). Now the news is that many of those 18,000 EFDs the NBR distributed at its own cost are either malfunctioning or have gone out of order. The ECR worked for a decade but the EFDs have developed problems within five years. Unless the machines are of substandard quality, those should not lose their active life span so soon. If the ECR proved good enough for the purpose in Turkey, South Korea and Poland, why should it fail to serve similarly here and, therefore, had to be withdrawn in the first place?
Detractors complain that the EFDs or for that matter the ECRs are not to blame, it is those people who are involved with their procurement, installation and use at the field level. Mind it, the number of machines is just a handful compared to the need of the country. Those were installed in three regions of Dhaka and Chattogram only, leaving the vast number of outlets in the rest of the country to issue invoices manually. Although the authorities claim that 60,000 more EFDs will be installed this fiscal, the problems facing the already installed ones cast a shadow of doubt over the success of the programme. In this case, mutual interests allegedly of both shop owners and a section of tax men have been responsible for not allowing the programmes to be successful. Machines are not so much to blame as men are. Successful execution of the programme by ECRs in the three countries mentioned above corroborates the fact.
The bottom line is that the NBR with limited capacities is further weakened by a collusion between VAT payers and some of its staff responsible for doing the task. It is clear that the NBR authorities are still trying to develop systems of collection of VAT or other taxes to perfection. The latest news about a partnership with a private company looks encouraging because the company will be in charge of installing and managing the EFD management system (EFDMS) in exchange for a small percentage of revenue earned. In its own interest, the company will have to accomplish the job well. This can bring about a paradigm shift in revenue collection.