NBR to intensify efforts to enhance VAT collection from service sector
Friday, 24 August 2007
Doulot Akter Mala
The National Board of Revenue (NBR) has decided to intensify its efforts to enhance collection of Value Added Tax (VAT) from service sector.
The board will conduct a survey in different organisations, including bar council, Doctors Association of Bangladesh (DAB), aiming to realise VAT from there, sources concerned said.
The board will soon collect lists of professionals, including specialist physicians, law advisers, dentists and coaching centres.
The board has taken the decision at a recent meeting with the VAT department.
NBR chairman Badiur Rahman, who chaired the meeting, gave direction to conduct the initial survey on the newly extended sector of VAT.
The budget for fiscal 2007-08 has expanded the VAT network covering more goods and services.
The new categories, which will come under the VAT net, include immigration advisers, specialist doctors, law advisers, English medium schools, private medical and engineering colleges etc.
The VAT department of the board will also closely monitor the cell phone companies on their payment of VAT, as per the decision at the meeting.
All commissioners of the VAT department have been assigned to implement the decision.
The VAT department will prepare a report on impediments to achieving the revenue target of Tk 158.90 billion for fiscal 2007-08.
The report will contain all the necessary information concerning arrears, writ petitions, shortage of manpower, logistics and computerisation.
In fiscal 2006-07, the government collected VAT worth nearly Tk 124.11 billion against the revised target of Tk 125.05 billion.
Sources said the VAT collection could have been Tk 500 million more if the department had realised the outstanding dues worth Tk 6.0 billion and Tk 2.40 billion against writ petitions of SIM card and eastern refinery respectively.
The government that repeatedly failed to achieve fiscal target of tax revenue collection could easily reach the level by increasing VAT collection, sources said.
According to recent findings of a government intelligence agency, the NBR could have injected a large volume of tax revenue into the national exchequer had it monitored VAT collection properly.
The VAT department has maintained 13.87 per cent growth since 1995.
The government has been deprived of a large amount of revenue from the service sector due to a nexus between taxmen and businesses, the intelligence agency findings said.
A large number of small shopping malls, roadside shops, hotels, restaurants, hospitals are still unaware or unwilling to issue sale receipts to evade VAT.
The government set tax revenue target at Tk 438.50 billion for the current fiscal, up by 16.99 per cent over that of the fiscal 2006-07.
In the current fiscal, VAT is expected to contribute 36.24 per cent, import duty 21.33 per cent, income tax 24.72 per cent, supplementary duties 16.35 per cent, and other tax 1.37 per cent to the total revenue earning.
VAT collection target was revised to Tk 136.83 billion from Tk 147.29 billion in fiscal 2006-07 followed by Tk 123.98 billion from Tk 126.75 billion in 2005-06 and Tk 106.05 billion from Tk 106.06 billion in 2004-05.
The government collected VAT worth Tk 124.89 billion and Tk 113.05 billion in fiscal 2006-07 and 2005-06 respectively.
The government has been gradually receiving higher VAT revenue over that of the customs department, which is considered as the highest tax revenue earner of the country.
In the current fiscal, the VAT department has been able to collect 0.20 per cent more than that of its revised target, up by 10.61 per cent of the previous fiscal.
The NBR insiders believe the government will set a higher target for VAT collection in near future due to its upward trend in revenue collection.
It is also contemplating making the installation of electric cash register mandatory in the businesses from the next fiscal.
In the current fiscal budget, the government has waived the duty on import of electric cash register to encourage the businesses install the system to ensure transparency in billing system.
The National Board of Revenue (NBR) has decided to intensify its efforts to enhance collection of Value Added Tax (VAT) from service sector.
The board will conduct a survey in different organisations, including bar council, Doctors Association of Bangladesh (DAB), aiming to realise VAT from there, sources concerned said.
The board will soon collect lists of professionals, including specialist physicians, law advisers, dentists and coaching centres.
The board has taken the decision at a recent meeting with the VAT department.
NBR chairman Badiur Rahman, who chaired the meeting, gave direction to conduct the initial survey on the newly extended sector of VAT.
The budget for fiscal 2007-08 has expanded the VAT network covering more goods and services.
The new categories, which will come under the VAT net, include immigration advisers, specialist doctors, law advisers, English medium schools, private medical and engineering colleges etc.
The VAT department of the board will also closely monitor the cell phone companies on their payment of VAT, as per the decision at the meeting.
All commissioners of the VAT department have been assigned to implement the decision.
The VAT department will prepare a report on impediments to achieving the revenue target of Tk 158.90 billion for fiscal 2007-08.
The report will contain all the necessary information concerning arrears, writ petitions, shortage of manpower, logistics and computerisation.
In fiscal 2006-07, the government collected VAT worth nearly Tk 124.11 billion against the revised target of Tk 125.05 billion.
Sources said the VAT collection could have been Tk 500 million more if the department had realised the outstanding dues worth Tk 6.0 billion and Tk 2.40 billion against writ petitions of SIM card and eastern refinery respectively.
The government that repeatedly failed to achieve fiscal target of tax revenue collection could easily reach the level by increasing VAT collection, sources said.
According to recent findings of a government intelligence agency, the NBR could have injected a large volume of tax revenue into the national exchequer had it monitored VAT collection properly.
The VAT department has maintained 13.87 per cent growth since 1995.
The government has been deprived of a large amount of revenue from the service sector due to a nexus between taxmen and businesses, the intelligence agency findings said.
A large number of small shopping malls, roadside shops, hotels, restaurants, hospitals are still unaware or unwilling to issue sale receipts to evade VAT.
The government set tax revenue target at Tk 438.50 billion for the current fiscal, up by 16.99 per cent over that of the fiscal 2006-07.
In the current fiscal, VAT is expected to contribute 36.24 per cent, import duty 21.33 per cent, income tax 24.72 per cent, supplementary duties 16.35 per cent, and other tax 1.37 per cent to the total revenue earning.
VAT collection target was revised to Tk 136.83 billion from Tk 147.29 billion in fiscal 2006-07 followed by Tk 123.98 billion from Tk 126.75 billion in 2005-06 and Tk 106.05 billion from Tk 106.06 billion in 2004-05.
The government collected VAT worth Tk 124.89 billion and Tk 113.05 billion in fiscal 2006-07 and 2005-06 respectively.
The government has been gradually receiving higher VAT revenue over that of the customs department, which is considered as the highest tax revenue earner of the country.
In the current fiscal, the VAT department has been able to collect 0.20 per cent more than that of its revised target, up by 10.61 per cent of the previous fiscal.
The NBR insiders believe the government will set a higher target for VAT collection in near future due to its upward trend in revenue collection.
It is also contemplating making the installation of electric cash register mandatory in the businesses from the next fiscal.
In the current fiscal budget, the government has waived the duty on import of electric cash register to encourage the businesses install the system to ensure transparency in billing system.