City's fairly large business establishments that are paying package VAT will be identified and asked to pay VAT (value added tax) at regular rates.
Officials said the National Board of Revenue (NBR) recently started a move to collect names of the enterprises that are paying the package VAT despite having sizeable transactions.
It sought a list of such businesses from the four VAT commissionerates in South, East, West and North zones of the city.
Officials said a number of businesses having large amount of transactions have long been evading VAT by taking advantage of the package VAT facility meant for the small businesses.
The big ones will be identified for payment of VAT at regular rates, they added.
The package VAT system allows small businesses, especially the shops, to pay a fixed amount of VAT annually - irrespective of their transaction volumes.
Business organisations in Dhaka and Chittagong city corporations with value addition worth Tk 15,555 or having annual sales of Tk 0.7 million (monthly Tk 58,333) are allowed to pay the package VAT. Sources said the NBR has tightened its monitoring on the package VAT system, following widespread allegations of VAT evasion by a large number of business establishments.
Earlier, a section of businesses staged demonstration protesting the increase in the package VAT rates by two-fold for the current fiscal year (FY), prompting the NBR to hold a meeting with finance minister AMA Muhith recently.
Officials said the government has decided to revise downward the rates, as a result. The reduced rate might take retrospective effect from July 1, 2016.
The officials did not, however, disclose whether a final decision was taken about the revised rates.
The package VAT system is scheduled to be scrapped from July 1 this year if the government succeeds in implementing the new VAT and supplementary duty (SD) act 2012.
In accordance with the new law, small businesses having annual turnover up to Tk 3.0 million will be exempted from paying VAT while large ones will have to pay the VAT at regular rates.
Businesses, however, demanded continuation of the package VAT in the new VAT law.
Mainly some large businesses have raised their voice for continuing with the existing package VAT system (that generates an insignificant amount of revenue) as they were evading significant amount of VAT under its cover, officials said.
According to NBR, around 12,000 shops in the country pay a total of Tk 150-180 million annually under the package VAT system, which the NBR considers a major loophole in the VAT-collection system.
Earlier, the finance minister had instructed the NBR to sit with the businesses and adopt a flexible approach in enforcing provisions of the existing VAT law 1999.
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