NBR readies project to offer online VAT payment by \\\'18

The government has planned to bring about a major change in the Value Added Tax (VAT) payment system by facilitating payment of this particular tax online by 2018 to attract taxpayers and check evasions.
Government officials said Thursday the National Board of Revenue (NBR) would undertake its single largest project involving US$ 73 million to make the VAT payment system fully automated by December 2018.
The World Bank has come forward to pledge $ 60 million in financing for the VAT payment improvement programme. The remaining amount will come from the state coffer.
"We have a plan to introduce a sophisticated online VAT payment system where the clients will get all facilities available online. Any client will be able to register online and also pay VAT online," said an NBR official.
He said the programme would help ease the hassles the taxpayers were facing and also would ensure transparency in the payment system and thus boost the VAT collection of the NBR.
VAT is the largest contributor to the NBR's total revenue income. In the last financial year (FY) 2012-13, the NBR collected Tk 388 billion in VAT, followed by income tax to the tune of Tk 364 billion and import duties worth Tk 323 billion.
The largest portion of VAT comes from big companies and corporate houses. Their share of the VAT collection by NBR is nearly 60 per cent. The remaining 40 per cent comes from other sources including small taxpayers.
Bangladesh's VAT payment system is very complicated. It often discourages eligible taxpayers to pay taxes correctly to the government's exchequer.
In many cases, taxpayers do not pay their aggregate VAT to the NBR and they do it by bribing the tax officials, according to sources.
The online payment system would cut such corrupt practices, officials said.
Additional secretary of the Economic Relations Division (ERD) Arastoo Khan said a mission from the World Bank had visited Dhaka last month and discussed with the NBR and the ERD their part of financing for the VAT Improvement Programme.
During the discussion the World Bank "assured us of providing $60 million" which would be utilised to make the VAT payment system fully automated, he told the FE.
"We are hopeful of getting the assistance within few months and then it will help us start work on the VAT automation project," Mr Khan said.
Since VAT is the largest contributor to the overall tax income, its payment system should be made smooth and hassle-free for the taxpayers, Mr Arastoo Khan said.
The aggregate collections of tax revenue fell short of the target by around Tk 40 billion in the last fiscal year 2012-13 largely due to a significant fall in collection of import duties and domestic VAT, according to provisional figures of the revenue board.
The NBR collected Tk 1.08 trillion in taxes in the last fiscal against the target of Tk 1.12 trillion.