NBR puts on hold new VAT software for large companies

Doulot Akter Mala The National Board of Revenue (NBR) has put the operationalisation of the new Value Added Tax (VAT) software, on hold, for large companies until December 31 after it found the measure would require automation of the revenue board. The board has instructed its field-level VAT offices not to pursue businesses for installation of the newly prescribed software, which the NBR had earlier made mandatory from January 1 this year. Officials concerned said the authorities have found that the measures might not work without full automation of the NBR itself. Instead, the revenue board formed a committee, comprising IT experts from BUET, BASIS, NBR and its relevant wings, to work out a set of guideline for the taxmen's requirement for an accounting set-up vis-a-vis the companies. The committee is working in full swing to complete the guidelines before December, said a senior tax official. The NBR may have to extend the period for its latest suspension order, again, if the committee fails to complete its work within the stipulated time, he added. The NBR had earlier made installation of its prescribed software mandatory for the companies that are paying Tk 5.0 million in VAT on an annual basis. With the successful execution of the software, the VAT wing will be able to establish its connectivity with around 1200 businesses. These companies alone account for more than 85 per cent of the aggregate amount of VAT collections from domestic sources. The board aims to get access to the accounting system of large companies to check tax evasion through concealment of actual business transactions. Three months after the issuance of its earlier instruction to the companies to install the VAT software, the NBR authorities have now realised that the operationalisatin of its measure would require a further review. In the meantime, some of the field offices took the move, involving the concerned VAT payers within their respective areas and issued several notices upon them for putting the software in place. The board also selected five software companies by inviting tenders. Among the large taxpayers, the multinational companies Nestle Bangladesh and the fast-moving consumer goods company Marico Bangladesh have already procured the software. Some 10 other companies also signed agreements with the software companies to replace their existing accounting software. The NBR official said on receipt of complaints from some large corporate taxpayers which included, among others, including banks, the NBR felt the need to review its move. Also the incumbent NBR chairman expressed his reservation about the selection of some five companies for large VAT payers. Some bankers alleged that despite several attempts, they had failed to get any favourable response from the software companies assuring, them about when the software would be supplied to be them. They also found the companies not yet prepared to supply high-end software for banks. Specially, the private commercial banks need a fully security-proof accounting system and they have to be more cautious about protecting the rights of their depositor-clients. The official said the VAT wing is yet to be fully automated to handle the data of the large companies after setting up of interconnectivity. The pace of works for NBR automation project should be expedited for successful execution of the VAT software, he observed. The NBR official said large companies already have their own high-end software for maintenance of their accounts. "We don't feel any need for replacing the existing software of the large companies. They can add some components in accordance with the provisions of the NBR directives," the official said.