NBR's fresh to-do list for VAT boost

In a do-over-again exercise, the revenue board considers a remake of the failed electronic fiscal device and spot cashback or lucrative lottery as new bets to make VAT attractive to consumers.
The VAT authority's lottery programme, launched in 2020, could not motivate or lure the consumers despite offering considerable amount of prize money.
Under the EFD Management System lottery policy, a total of 101 consumers can get prizes ranging from Tk 0.1 million to Tk 10,000 on the basis of their EFD-generated invoices by allocating more than Tk 1. 2 million per month.
Until December 2023, the National Board of Revenue (NBR) had held 35 lottery draws, on the fifth day of every month, but not got response from even 5.0 per cent of the consumers to claim the lottery prizes.
Dr Ahsan H Mansur, Executive Director of the Policy Research Institute (PRI), however, would like to attribute the lukewarm response to NBR's inadequate campaigns to make the incentives attractive.
Officials say the NBR -- in an apparent bid to save the situation -- has planned to change the stimulus methods by framing a separate strategy through studying the consumers' area of interest.
The NBR member for VAT implementation, Dr Moinul Khan, has said revenue board, in cooperation with the new vendor, Genex Infosys, will launch a massive campaign to motivate consumers with more rewarding experiences like instant cashbacks or lottery.
"NBR is more interested to see that the businesses use the machines on their own and the shoppers take the receipts willingly through the machines," he said, on a note of hope against hope pinned on the fresh start.
Now VAT officers will monitor the businesses and collection of VAT through their window to EFDMS, in case of any allegation only.
"We are willing to create an ideal situation where buyers choose to go to shops with machines installed and get invoices issued to them. At the same time, retailers will come to VAT offices to get the machines installed willingly because shops without machines do not find buyers more than those with machines," he added.
Also, a bunch of interoperable features in the new device, under a contract signed with the third party in August last, would facilitate consumers.
"The missing features of the electronic device were among the major barriers to making the electronic device's use efficient, with interoperability in main server, which has been addressed in the new ones being supplied by third party," says a VAT commissioner in a zone.
Until November 2023, the vendor had installed some 10,000 devices through replacing the previously NBR-installed ones, according to NBR data.
The new machines have been prepared as per specifications of the VAT authority so that they can see real-time transactions, the commissioner informed.
Four major features of the electronic fiscal device (EFD) -- product code-reader option with invoice issuance, card-payment options for consumers, return submission for businesses, and automated chalan (a-chalan) issuance -- would make the new EFD popular among the commoners and businesses as well, he hopes.
"In this new EFDMS, retailers will get multiple benefits like submitting returns through their machines, and make their VAT payment too," Dr Khan has said.
They can also use the machines for different types of cards like debit or credit card.
Necessity of in-person visit to VAT offices would be reduced after its successful installation, he added.
Also, the VAT officers will not create any "unnecessary trouble" to them for their VAT collection and payment after the automated system takes roots.
NBR high-ups say consumers could be major contributors to making the effort successful as unless they receive invoices after purchase, the government would not be able to receive their paid VAT for the public exchequer.
The officials say the third-party facilitator has a target to install some 60,000 devices by June 30, 2024 in Dhaka and Chattagram business heartlands, where businesses are thus far concentrating in a centripetal manner.
Professor Mustafizur Rahman, Distinguished Fellow of the Centre for Policy Dialogue (CPD), also suggests a nationwide awareness campaign to instill a sense of civic duty in citizens as regards paying VAT.
"The target of installing 0.3 million EFDs over the next few years must be reached, backed by proper planning," he says.
A time-bound plan should be put in place to bring all eligible VAT-collecting points under the net.
"Payment must be monitored rigorously, and enforcement strengthened. NBR's required human resources will need to be ensured to carry out these tasks," he added.
The NBR observed VAT day on December 10 with a motto of motivating consumers to obtain EFD-generated invoices in its bid to give a much-needed boost to revenue receipt on a par with Bangladesh's elevation onto higher levels of development.

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