Country's VAT collection system is likely to be fully automated from the beginning of the next year and such electronic payment (e-payment) will gradually be made mandatory aiming to halt dodging of value added tax (VAT).
"We're hopeful about making VAT payment system fully automated from the beginning of the next year . . . such electronic payment (e-payment) will gradually be made compulsory for all concerned," said an official of the National Board of Revenue (NBR).
The implementation of e-payment system will play an important role in ensuring transparency in collection of revenue from internal sources.
The NBR official said the electronic payment (e-payment) will partially be made mandatory for VAT payment from the beginning of the next year.
In the first phase, VAT on e-payment is becoming mandatory for VAT invoices above Tk 1.0 crore, he said, adding that later, e-payment will be made compulsory for the payment of VAT gradually.
"NBR wants e-payment to be made mandatory as part of its plan to introduce modern tax payment system to prevent and control of revenue evasion," said the NBR official.
According to the NBR plan, the rate of VAT on compulsory e-payment will be gradually reduced to bring all businesses under the system. Move is underway to integrate 41 commercial banks with e-payment system to make it compulsory.
Since July 2020, the NBR launched an electronic payment system for indirect tax payment and from July 1 this year, e-payment has been made mandatory for payment of duty and tax above Tk 2 lakh.
Earlier, e-payment system was introduced in 2017 through 'ASYCUDA World' system but the desired results were not achieved yet.
NBR's income tax wing is also working to make e-payment mandatory for paying income tax by individual taxpayers. The revenue authorities also introduced Automated Invoice (A-Invoice) system in October 2020. Taxpayers have the opportunity to pay taxes and fees online through banking channels and mobile financial services. The NBR is also considering making A-Invoicing mandatory for individual taxpayers.
NBR officials said the Asian Development Bank (ADB) had recommended payment of VAT over Tk 50,000 using banking channels and MFS to improve VAT collection skills and reduce the risk of fraudulent transactions. However, the NBR initially decided to fix Tk 1.0 crore for making such payment.
Overall revenue collection witnessed a 17 per cent growth in the just-concluded fiscal year (FY21) over that of the previous FY20 despite economic slowdown due to the Covid-19 pandemic.
NBR had been able to collect Tk 2.56 trillion in the FY 2020-21 against Tk 2.18 trillion in the previous FY20.
The income tax wing collected Tk 850 billion, VAT wing Tk 940 billion, and customs wing Tk 770 billion in FY21.