bdnews24.com :
The World Bank has approved a loan to modernise Bangladesh’s VAT administration and collection system.
The Washington based global lender’s Dhaka office on Saturday said its board approved the $60 million credit on Friday.
A project styled ‘VAT Improvement Program’ will introduce automation, including on-line VAT payment services, and improve transparency in the VAT administration system with this loan.
The credit from its concessionary arm IDA has 40 years for maturity with a 10-year grace period and carries a service charge of 0.75 percent.
The project aims to increase VAT’s contribution to the GDP by at least one percentage point by 2019 when it targets to push the number of active registered taxpayers to 85,000 from current 35,000.
VAT accounted for 3.7 percent of the total GDP in 2012-13 fiscal.
World Bank Country Director in Dhaka Johannes Zutt said Bangladesh’s tax collection remains “low” compared to other South Asia countries.
But he said it was “critical” to increase tax collection “for faster economic growth and to overcome poverty”.
“This project will improve taxpayer services, encourage better compliance and increase tax revenue by automating the VAT system,” he was quoted as saying in a media release.
It will support the government to implement the new VAT law which comes into effect next year and aims to provide better services and reduced administrative costs for taxpayers.
The project will include a campaign to raise awareness of the need to register and file VAT.
“The project will include regular disclosure of performance information to the public so they can monitor progress with the project including the tax collection,” the World Bank’s VAT Improvement Program Project Team Leader Tracey Mary Lane said.
“It will also create a contact center for taxypayers to get more information on the new VAT and how to pay the tax as well as file complaints.”
Mary Lane said the use of an automated system would help the VAT Wing “to be more effective in resolving disputes and finding irregularities”.
