Around 63 per cent of the total cost of the VAT Online Project (VOP) has remained unspent though the deadline for its execution is set to end on December 31 next. The cost of the project is Tk. 6.90 billion. Most modules necessary to automate the VAT system are yet to be implemented. Officials concerned have ruled out the possibility of any further extension of the project life. Only four modules could be developed until now out of the total of 16 modules.
The work of the VOP was never fast enough to meet the deadline. They blamed the lack of required skills of the Vietnamese firm FPT and massive changes in the VAT law from the original one, framed in 2012, also for the reduced pace of project implementation. The VOP has paid Tk 1.09 billion to the FPT for developing the IVAS system and purchasing hardware to automate the VAT administration. The NBR may not pay the full amount of Tk 2.38 billion to the firm as per contract as the firm will not be able to complete its work by the deadline. The VOP has so far introduced online VAT registration, online VAT return, taxpayers account and e-payment system. However, the field-level VAT officials were sceptical about the online VAT return system while businesses raised allegation about unusual delay in getting online VAT registration.
We can easily understand something is wrong with NBR when the president of the Federation of Bangladesh Chambers of Commerce and Industries (FBCCI), Sheikh Fazle Fahim says investigations should be opened against a section of officials and consultants of the National Board of Revenue (NBR).
VAT law expert and executive director of Policy Research Institute (PRI), Ahsan H Mansur had stated previously that a good proposal was given for the administrative reforms of VAT in NBR. But that could not be implemented due to objections from the field level officials of NBR.
Creating zones for VAT collection is the main reason of harassment, where commissioners determine everything. This system exists nowhere in the world. Nobody has supreme authority in other countries. Initially a French firm was selected for the appointment of consultants as they were efficient. The decision was changed for political reasons and a Vietnamese firm was appointed. Everyone knew they came to make money. The firm took officials to different countries on pleasure trips.
Can we expect that the NBR will appoint competent people to truly overhaul the system, and by thus doing so, let go of its own powers? It seems unlikely. What happened before will probably happen again unless the system itself is radically changed.
