The revenue board may share up to 2.0 per cent of VAT with the vendors of electronic cash register (ECR) for their after-sales monitoring service, as the existing system floundered.
Sources said the revenue board opted for revenue sharing to encourage the computing-machine suppliers to ensure failsafe operation of the machines in VAT (value-added tax) collection at business outlets.
The initiative comes as a last resort as an alleged collusion between a section of sellers and taxmen rendered the existing computing systems dysfunctional.
Under the arrangement, an ECR-supplying company will be responsible for maintenance and providing service to the retail ECR-installed outlets to keep those devices operational.
"We are planning to introduce 'revenue-sharing module' with the ECR vendors to encourage them to provide instant services to the ECR-installed outlets," said a senior official of the National Board of Revenue (NBR).
The VAT online project (VoP) is now finalising a business module by incorporating the revenue-sharing method, he said.
A summary will be sent in this regard to the government high-ups to get the seal of approval on the participatory tax-collection method.
A company having good reputation will be selected through inviting tender for supply of ECR to the retail outlets, the official said.
The company will get around 1.0 to 2.0 per cent of the VAT the NBR is expected to collect from the ECR-installed retail outlets, he added.
"It would be an incentive for the company to monitor and provide maintenance service to the ECR outlets," he said.
However, the revenue official said, the businesses will not have to bear cost of that incentive to the ECR company.
All of the existing ECRs have to be replaced as the outlets have to install the device as per NBR-prescribed format.
"Currently, many of the ECR machines remained inoperative or went out of order as vendors had just sold those without having agreement on after-sales services," the official said.
The whole ECR system was not currently functioning as per expectation of the revenue board, causing loss of VAT to the public exchequer, he added.
Some businesses deliberately kept their ECR machines inoperative to avoid recorded transactions and evade VAT thereby.
There are 9,000 outlets as per list of the field-level commissioners where new ECR machine would be required.
"As per our estimate, the ECR-supplying company would require 1.0 to 2.0 per cent share of the collected revenue to come to a break-even point by providing maintenance service to those outlets," the official said.
According to roughly compiled data of the large distribution companies of consumer goods, there are some 1.8 million shops -- retail and wholesale -- across the country.
Officials said those shops are yet to come under the database of the field-level VAT offices. Ultimately, ECR has to be installed in all of those shops in phases.
Earlier, the government had announced the import and supply of ECR to the shops at its own initiative. Later, it backtracked on the move on realisation that the ECR system would not sustain sans after-sales service.
Allegations are rife that a section of VAT officials take largesse from the retail-level outlets and intentionally overlook inactive ECR machines on several excuses.
The NBR, in 2010, made installation of ECR mandatory for 11 categories of businesses, including hotels, restaurants, sweetmeat shops, departmental and general stores, jewellery, all shops at shopping malls in the metropolitan areas and, medium- and large wholesale and retail shops across the country.
Talking to the FE Monday, Abdul Mannan Patowary, who was an NBR member when the government made ECR mandatory, welcomed the initiative to make the machine operational.
"As vendor will get a percentage of VAT, they will be encouraged to provide maintenance service," he said.
On the existing situation of ECR, he said the government started the ECR concept enthusiastically but lost much of it following non-cooperation of the businesses.
"The NBR could not take next steps properly after making the ECR mandatory for businesses," said Mr Patowary, now consultant of M.A Mannan Patowary and Associates.
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