The collection of value-added tax (VAT) from retail and wholesale businesses grew by 35.5 per cent in the commercial areas of the capital, largely for the installation of Electronic Fiscal Devices (EFDs) and intensified enforcement.
The Dhaka South Zone, which includes the old Dhaka, Motijheel, Shegun Bagicha, Tejgoan, Dhanmondi, Lalbagh, Kotwali, Narayanganj and Munshiganj, collected an additional Tk 1.69 billion in VAT from retail and wholesale businesses in the last fiscal year, according to official data.
The aggregate VAT collection from these areas registered nearly a 20 per cent growth, the highest among the other 12 VAT zones across the country.
Even amid the inflationary impact on product prices, both effort-based and source-based VAT collections grew by 20 per cent each - the highest in the last three fiscal years.
The Dhaka South Zone achieved growth rates of 18.28 per cent, 17.20 per cent and 15.72 per cent in the last three corresponding fiscal years, FY 21, FY 20 and FY 19.
Showkat Ali Saadi, the commissioner of VAT South Zone, said that the installation of EFDs and monitoring by revenue board high-ups paid off last year in increasing VAT collection.
Earlier, there was a package VAT system for retail and wholesale businesses, where businessmen used to pay a lump sum amount, he said.
VAT officials at field offices are now furnishing month-to-month data on increasing VAT collection from EFD-installed shops, Showkat Ali said.
"Though the volume of VAT collection is not very high in retail shops, proper depositing of the VAT into the public exchequer means a lot to the common people," he added.
Through intensified efforts, VAT officials have collected an additional Tk 3.21 billion, while source-based VAT collection grew by Tk 18.28 billion. VAT collection from hotels and restaurants in the areas also grew
by 14 per cent, while sweetmeat shops saw an increase of 25.13 per cent.
A statement of the Dhaka (South) Zone has mentioned that a total of 2890 EFDs and Sales Data Controllers (SDCs) have been installed in retail shops under the jurisdiction.
In the month of July, the zone collected around Tk 120 million in VAT from the EFD-installed shops.
Excise duty collection in the area has increased by 9.4 per cent, while VAT from airline tickets grew by 52.9 per cent.
From suppliers, the VAT zone has collected 35.4 per cent more VAT, totalling Tk 46.83 billion, an increase of Tk 12.24 billion from last year. From building development firms, it has collected Tk 3.98 billion, a rise of 74.4 per cent.
VAT collection from leases and tenants of spaces increased by 10.8 per cent in the last fiscal year. From advertising firms, the zone has collected Tk 237 million higher VAT, marking an 11.8 per cent increase.
Electricity consumers in this area have paid 24.8 per cent more VAT, totalling Tk 943 million in FY 23.
Under the Dhaka (South) Zone, there were a total of 110,692 Business Identification Numbers (BINs) in FY 2022-23, up from 88,775 in the previous year. Online submission of VAT returns grew by 29 per cent last year under the zone.
Solaiman Parsee Faisal, VAT adviser of the Tubewell and Pipe Merchant Association in Old Dhaka, said that the intensified efforts of the VAT wing helped level the playing field for businesses.
"We used to face uneven competition by paying VAT regularly, while some other businesses used to evade it," he said.
He urged for ensuring a tax-friendly environment and curbing underhand dealings by corrupt businesses and VAT officials.
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