NBR targets profitable units that remain outside tax net

Doulot Akter Mala | Published: July 28, 2008 00:00:00 | Updated: February 01, 2018 00:00:00

The National Board of Revenue (NBR) will look for the profitable organisations that still remain outside the tax net, officials said.

The taxmen will gear up efforts to find out the business establishments that maintain a considerable amount of turnover for long without being registered with the VAT department, they said.

The board has drawn up a work plan to realise VAT from service sectors in the current fiscal against the backdrop of poor collections from the booming industry, they said.

The revenue board expanded VAT net in some service providing sectors, including repairing and servicing, chewing tobacco and Gul, in the current fiscal.

VAT department has formed a special team to monitor newly expanded service providers and bring them under VAT net.

The NBR has estimated the VAT collection to rise by about Tk 30.12 billion in the current fiscal due to expansion of tax net.

VAT collection target for current fiscal has been set at Tk 183.54 billion taking a 21.46 per cent growth over the revised target of Tk 151.11 billion for 2007-08.

"The NBR will get a big chunk of tax by monitoring the persons, organisations, security service, legal adviser and engineering firms involved with those services," an official said.

The VAT department will strengthen surveillance in the areas of tax-rebate, auditing and VAT evasion through introduction of electronic cash register (ECR).

The VAT department will also keep a watch on the companies that have paid lower tax than that of the previous fiscal, VAT officials said.

There are a number of businesses who are paying tax much below the logical level, they added.

The VAT department will streamline VAT payment from those shops and business establishments, the officials said.

In the current fiscal, the government issued order to install ECR in big and medium business houses, starting from January 1, 2009.

Taxmen expect that the VAT collection from service sector will rise significantly if field officials can successfully motivate the businessmen on installation of the ECR.

The revenue board has also sought list of companies that are entitled to pay tax under higher VAT threshold for SMEs and cottage industries.

In 2007-08, VAT department lagged behind income tax and customs department in revenue collection.

The growth of revenue collected by income tax department was at 32.78 per cent growth, customs department at 26.71 per cent and VAT at 22. 53 per cent over the levels in the previous fiscal.

Collection of income tax department and customs during fiscal 2007-08 was higher compared to that in the six preceding fiscals.

Growth of VAT department never exceeded 26.11 per cent since 2003-04 largely because of poor performance of service sectors.

Growth rate of VAT collection was 12.70 per cent in 2003-04 while 11.75 per cent in 2004-05, 26.11 per cent in 2005-06, 10.63 per cent in 2006-07.