Journey towards paperless taxation system

Conventional taxation system is considered as one of the major barriers to expediting growth of the country's tax-GDP ratio. The country's tax-GDP ratio is less than 10.0 per cent, which is one of the poorest in South-East Asia. There are widespread complaints from taxpayers over the complex taxation system. Businesses and taxpayers have long been demanding a hassle-free and friendly environment to encourage payment of taxes. Development partners and multilateral donors have also extended their support to automate the taxation system. Currently, many taxpayers are avoiding tax offices due to their negative perception about taxmen.
Addressing the issues, the country's tax authority has speeded up the move towards automation of the tax administration. The taxmen have changed their strategies adopting a new concept to ensure better services to the taxpayers. The motto is to raise tax collection through making the services available at the doorsteps of people. To come out from the typical taxation system the National Board of Revenue (NBR) has already introduced online tax payment system, e-TIN registration. It also started automated Customs and VAT system. Such initiatives to modernise the taxation system have created hopes among the taxpayers over a hassle-free taxation system. Paperless tax administration will be introduced shortly to take services to the doorsteps of the taxpayers.
Online issuance of Taxpayers' Identification Number (TIN)
After relentless efforts for long three years, the NBR on July 1, 2013 introduced online TIN system, known as e-TIN. Taxpayers can now obtain TIN online within a few minutes. The online TIN system is interconnected with the website of the Election Commission (EC). The information furnished by the taxpayers in the website is matched with voter identity cards before issuance of TIN certificates online. No paper is required to complete the procedures.    
TIN is one of the major components of taxation system. It is required for obtaining some 18 services at government and private offices. It was a troublesome job earlier to obtain TIN. Taxpayers often complained about unusual delays, harassment and unnecessary expenditures when they went to tax offices for a new TIN.   
Also, there were fake TINs and fictitious TIN data as a large number of TINs did not have valid addresses. The number of actual taxpayers, who submit tax returns, was far below that of the TIN holders. The taxation authority was also in trouble with the false picture of the number of taxpayers. The number of TIN holders was 3.8 million while only less than 1.0 million taxpayers submitted tax returns every year. In a move to clean the false TIN data, the taxmen have found some 1.7 million with valid addresses.  
The e-Tin system will resolve the problem. All of the existing TIN holders have to re-register their existing TINs and obtain new ones. Thus, the fake and duplicate TINs will be erased.
Under the system, taxpayers will submit TIN application forms, duly filled up, on the website. The site will crosscheck the information furnished by the taxpayers with the National Identity Card they had submitted and issue a TIN. Taxpayers will get TIN certificates in their e-mails within few minutes. With the introduction of the e-TIN, hassle and harassment on obtaining TIN has been resolved.   
Experts and taxpayers termed the e-TIN as a landmark in the tax revenue administration. The system has been developed with the technical cooperation of International Finance Corporation (IFC).
E-payment
Now-a-days taxpayers can pay taxes from anywhere through e-payment system. The system was formally introduced on May 26, 2012.  
A tripartite agreement was signed amongst NBR, Sonali Bank and IT Consultants Limited (Q-Cash) to introduce first-ever online tax payment system. Taxpayers can pay tax through online using Debit, Credit, VISA or pre-paid card. Even taxpayers, who do not have those cards, can use others' cards or bank accounts for payment of tax through online.
Both Q-Cash member and non-member banks can pay tax online. Non-members will have to connect to Q-cash online payment gateway and settle through Sonali Bank. Some 30 banks are connected with Q-Cash.
Taxpayers can pay taxes easily within a short time online which will also help the government increase its revenue earnings. Sonali Bank is acting as the settlement bank for NBR transactions and also providing inter-bank settlement service.
Asycuda World
The NBR introduced ASYCUDA (Automated System for Custom Data) World at the Chittagong Customs House on July 1, 2013. With the introduction of the system, the country's Customs department upgraded its data processing software to a world-class paperless regime.
The system will help reduce processing time of trade data and expedite revenue collection. The United Nations Conference on Trade and Development (UNCTAD) developed the ASYCUDA World software programme.
The system will facilitate Customs administration and traders to handle most of their transactions - from Customs declarations to cargo manifests and transit documents - via internet. Both Customs authority and businessmen will be able to access their bills of entry and other documents relating to import of products.
The system will be implemented at all Customs houses in phases. Customs houses will be interconnected with each other and would be able to crosscheck documents to cut back tax evasion.
The NBR in January this year signed a deal with the UNCTAD to establish interconnectivity among the country's 12 major Customs houses for sharing data to check under-invoicing and duty evasion.
Under the agreement, an 18-month project including launching of ASYCUDA World will be completed by June 2014. Customs authorities aim to provide a single window service on completion of the project.
Data and export-import related documents will be processed paperless and the users, service providers and receivers can use this system from anywhere, even from mobile phones.
ASYCUDA World is another step forward to comply with the conditions of World Trade Organisation (WTO) and World Customs Organisation (WCO) to fully automate the country's Customs system.
Currently 90 countries are using this system to make foreign trade simpler and faster while making international markets more accessible to enterprises from developing countries.
VAT automation
The National Board of Revenue (NBR) on October 8, 2013 received approval of the Executive Committee of the National Economic Council (ECNEC) on a project titled 'VAT and Supplementary Duty (SD) automation'. After implementation of the project, private and public companies will be able to submit their returns and pay tax through online. A paperless VAT payment and collection system will be ensured after successful implementation of the project.
The project will pave the way on implementation of the new VAT law. The NBR is going to execute new VAT and SD law from July 1, 2015. The Parliament passed the law on November 27, 2012. VAT wing will be fully automated and digitalised for proper implementation of the new law. The NBR has formulated the new VAT and SD law following recommendations of the International Monetary Fund (IMF). The IMF tagged the condition of implementation of new VAT law against disbursement of fund under Extended Credit Facility (ECF).
As groundwork on execution of the new VAT law, the project will float tender to procure software, impart training for VAT officials and appoint consultants.
Prospects and Constraints:
All of the above steps have been taken to provide services at doorsteps of people through automated taxation system. The widespread allegation on unusual harassment and complexities in taxation system will be resolved. However, there is a necessity for a holistic approach to automate the total tax revenue administration. Scattered move to automate one of the wings will not bring the desired result. Income tax, Customs and VAT wings need to be interconnected with each other to make the automated taxation system successful.
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The writer is a Special Correspondent of the FE.