In a bid to streamline the VAT collection system, the National Board of Revenue (NBR) has taken a move to set up Electronic Fiscal Device (EFD) from this February at all sales points of different business outlets across the country.
The Value-Added Tax Wing of NBR, in the first slot, will set up some 10 thousand EFD machines at the sales and service points in Dhaka and Chattogram regions.
However, the revenue authority will gradually bring one lakh eligible sales and service points across the country under this system, and in line with the move NBR has also appointed 3 firms to import EFD machines, sources said.
NBR officials said the price of each EFD machine would be from Tk 10,000 to one lakh as there would be no duty on the import of this machine.
EFD is the update version of Electronic Cash Register (ECR) machine NBR first introduced in 2008 for traders to keep the registers of their daily transactions.
However, most of the traders did not follow the direction seriously as NBR did not make it compulsory for all.
NBR in October last issued a gazette notification making use of EFD machine mandatory for 13 types of sales and services provided by business outlets in district and city corporation areas, including VAT, Customs and Excise Commissionerate listed outlets.
The sectors are residential hotel, restaurants and fast food shop, confectionery store, furniture sale center, clothing sales point, batik shop, beauty parlor, sale points of electronic and electrical home appliances, and community centers.
Besides, all business outlets of mega shopping malls, departmental stores, supermarket, and gold or silver shops must use the EFD, as per NBR gazette.
EFD is a latest technology-based electronic device capable of keeping any trader’s daily sales registers accurately.
NBR officials said EFD machines would directly be connected to the VAT Online project which would enable NBR officials to control all the devices centrally, and they would even have the option to switch off the device whenever they find any irregularity.
Besides, every business outlet would be given a business identification number (BIN) against each EFD machine, and NBR would also provide an authorized number against every EFD machine.
No trader would be able to print the sales’ voucher without having this number, said NBR officials.
However, if any business outlet has plural cash points they would be provided a single BIN, the officials said.
As per VAT Act-1991, the traders having an annual turnover from Tk 80 lakh to Tk 5 crore must have an EFD to maintain their daily transactions.
The provision was incorporated so that the traders could not evade VAT hiding the actual business transactions.
The government in the last budget for the current fiscal (2018-19) made the EFD machine compulsory for all sales outlets to streamline the VAT wing.
NBR was scheduled to run EFD machine at the business outlets in the city corporation areas since November last and district level the following month but they could not do so.
A senior VAT official with regard to the issue told this correspondent that they, due to some difficulties, could not run EFD machine since November but he assured that the move would start from this month.
“The VAT revenue would be double once the EFD machine comes into effect with full operation,” he said.
According to statistics, NBR’s total VAT revenue comes from only 10 percent of the total business entities of the country.
There is serious allegation that many small and medium business entities do not pay VAT properly and that is why they are reluctant to use ECR or FDI.
However, NBR has now kept provision of penalties if any irregularity is found with regard to the issue.
As per Section 37 of VAT Act-1991, if a trader does not use the EFD machine intentionally he or she would be punished by half of the evaded VAT or an equivalent amount of money.
Besides, additional financial penalty amounting from Tk 20,000 to Tk 50,000 may also be imposed in the same case.