NBR seeks DCs’ help in VAT collection

Doulot Akter Mala | Published: August 26, 2016 00:00:00 | Updated: February 01, 2018 00:00:00

The National Board of Revenue (NBR) has sought cooperation from the district administrations to ensure compliance with VAT payments by the businesses operating outside cities.
The Value Added Tax (VAT) wing under the board has recently sent letters to all Deputy Commissioners (DCs) across the country and requested them to help NBR collect VAT deduction at source (VDS) and bring more businesses under VAT registration network.
Senior secretary of Internal Resources Division (IRD) and NBR chairman Nojibur Rahman has recently sought cooperation on collection of VAT.
VAT collection contributes 37 per cent of the total tax revenue target.
In the current fiscal year (FY), the government has set highest target of Tk 727.64 billion for VAT department among its three wings.
In the letter, the NBR chairman urged the DCs to initiate four steps on priority basis for increasing VAT collection.
The NBR has also requested the DCs to intensify monitoring of VAT-able organisations under their respective jurisdiction, ensure VAT deduction and deposit it properly, motivate businesses in district development coordination committee and administration forum by highlighting positive aspects, giving priority to revenue collection and cooperate with local VAT offices at district level. Â
It has explained the details on the areas and provision of VAT law where DCs can extend their cooperation in enhancing VAT collection.
According to Section 15 (1) of VAT law-1991, suppliers of VAT-able products and service providers must have VAT registration number. There is a penal provision in case of non-compliance with the law, the letter said.
Seven types of organisations and companies are authorised to deduct VAT at source as per rule 18 (Ka) of VAT law-1991.
These are: government, semi-government and autonomous body, bank, insurance and other financial organisation, limited company, educational institution, non-governmental organisations (NGOs) and companies having annual turnover of Tk 10 million.
VDS (VAT deduction at source) is applicable to some 38 services. As per existing VAT law, the authorities have to deposit deducted VAT with the public exchequer within 15 days after VAT collection. The authority will issue VAT-12kha form within five working days of the deposit of VAT.
Apart from 38 services, other services will not require VDS as they have to pay VAT at the time of service receipt.
In the budget for FY 2016-17, the NBR has increased VAT rate for construction sector, motor garage, workshop, dockyard, petroleum and other transport with effect from June 2, 2016.
Officials said the number of VAT compliers among the businesses is poor due to lack of proper enforcement of law and non-recorded business transaction.
There are some 840,000 Businesses Identification Number (BIN) holders under NBR. Of them, less than 40,000 submit VAT returns.
The new VAT and Supplementary duty law-2012 is scheduled to come into force from July 1, 2017. The NBR expects a significant rise in VAT compliance after implementation of new VAT law.
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