NBR to make available ECRs to businesses at cost price

The National Board of Revenue (NBR) has sought an allocation of Tk 1.0 billion to buy some 10,000 units of electronic cash register (ECR) to be given to retail and wholesale businesses in a bid to stop tax dodging, officials said.

NBR Chairman Nojibur Rahman, in a letter last week to finance secretary Mahbub Ahmed, sought the allocation immediately referring to a directive of Finance Minister AMA Muhith, who asked for buying and installing the ECR machines in business entities, they added.

The move to supply the ECR machines to businesses at import cost has been taken as part of the government's steps to enforce the new Value Added Tax (VAT) and Supplementary Duty Act, 2012 from next July.

The new law allows the revenue board to levy 15 per cent VAT at retail and wholesale levels. Wholesale and retail businesses contribute 13 per cent or Tk 2.0 trillion to the country's gross domestic product (GDP).

It is alleged that businesses at retail and wholesale levels charge VAT on customers but do not pay it to the government properly. The government is making the use of ECRs mandatory to stop tax evasion by these businesses.

The NBR Chairman estimates that if 15 per cent VAT could be realised from retailers and wholesalers through use of ECR machines, the revenue board could get Tk 300 billion as VAT annually from them.  

After calculating tax waiver, the NBR's earning from these sectors may stand at Tk 80 to Tk 100 billion.

The ECR machine is a device which contains fiscal memory and will help the revenue board get actual account of sales of a business entity. The devices will remain connected always with the server through a network so that the board officials can check if any businessman alters their memory or stop them working.

The NBR Chairman in the letter wrote that the activities of retail and wholesale businessmen can be brought under regulation once the new system is implemented properly.  It will help increase realisation of VAT and income tax significantly.

The revenue board has also planned to encourage consumers to collect invoices voluntarily during purchase of any product or services. In this regard, it plans to hold lottery based on invoice code numbers in every two months.

Earlier in a letter, the finance minister asked the NBR to make mandatory the installation of ECR machines in businesses currently paying VAT.

The revenue board initially found some 8,007 businesses eligible for installation of ECR machines.

As per the NBR guidelines, some 11 categories of shops have to install ECR machines mandatorily to keep all transactions and sales data. The categories include hotels, restaurants, sweetmeat shops, departmental and general stores, jewelry, all shops in shopping malls in metropolitan areas and medium and large wholesale and retail shops across the country.

     syful-islam@outlook.com