Business Desk :
According to the new law that was introduced in 2019, NBR has categorised different rates into five sectors, whereas, initially a single rate of 15% VAT was fixed.
However, NBR is yet to see benefits from the new law as VAT collection is yet to reach the set target.
When the new VAT law was introduced in 2019, the NBR’s review stated that VAT would increase by Tk15,000-20,000 crore every year, but in reality, VAT collection has been reduced by Tk2500 crore.
The target for VAT collection for the year 2019-2020 was Tk1,08,600 crore but only Tk84,852 crore has been collected.
In the previous year (FY2018-2019), under the old law, more than Tk87,000 crore was collected as VAT.
In the last fiscal year (2020-2021), VAT collection was Tk85,509 crore.
Upon asking about the implementation of the new VAT law and why the collection of VAT was not as much as expected, AB Mirza Azizul Islam, economist and financial adviser to the caretaker government told that “The new VAT law could not be successful as compromises have been made with traders on multiple issues. Moreover, the kind of automation that is needed to reap the benefits from the law has not been fully implemented yet.” “However, another reason could be the Covid-19 pandemic,” he added.
With the current scenario of VAT collection, NBR chairman Abu Hena Md Rahmatul Muneem said: “More than 38% of the revenue collected by the NBR comes from the VAT sector.”
Regarding this, another official of the NBR, preferring to remain anonymous, told that “There was a slowdown in trade and commerce due to the pandemic. Apart from this, other automation works including installation of VAT machines were not done in time.”
Electronic Fiscal Devices (EFD) for automatic VAT accounting that were supposed to be installed all over the country did not see the light of day as they were not installed outside Dhaka and Chittagong.
As of November 30, the number was only 3,478.
