$60m World Bank credit to modernise VAT admin

The World Bank will provide $ 60 million to modernise Bangladesh's value added tax (VAT) administration and boost tax revenue, reports UNB.
An agreement to this end was signed on Sunday at the Economic Relations Division (ERD) at Sher-e-Bangla Nagar in the city.
ERD Additional Secretary Kazi Shofiqul Azam and World Bank Lead Economist and Acting Country Director Salman Zaidi signed the deal on behalf of their respective sides.
The credit from the International Development Association (IDA), the arm of the World Bank Group that helps the world's poorest countries, has 40 years' maturity period with a 10-year grace period, and carries a service charge of 0.75 per cent.
The Washington-based lending agency is giving the fund under the VAT Improvement Programme Project, which will introduce automation, including online VAT payer services, and improve transparency in the VAT administration system.
The project eyes an increase in the ratio of VAT to Gross Domestic Product (GDP) by at least one percentage point of GDP by 2019. The VAT-GDP ratio for 2012-13 was 3.7 per cent.
It will support the government to implement the new VAT law which comes into effect in 2015 and aims to provide better services and reduced administrative costs for taxpayers.
The project will include a campaign to raise awareness of the need to register and file for VAT. The project will seek to increase the number of active registered taxpayers to 85,000 within the next five years compared to around 35,000 VAT payers today.
It will introduce modern business processes and Information Technology systems as well as a more transparent service-oriented tax administration. Registration, return processing, and tax payment will become possible online. This will reduce compliance costs for taxpayers.