The National Board of Revenue has sought the government’s approval to a proposal to extend time and cost for the VAT Online Project following suspension of new VAT law for two more years.
The project needs to be extended for two years until 2021 by increasing the cost by Tk 100 crore for the implementation of the Value-Added Tax and Supplementary Duty Act-2012 which was supposed to come into force from this fiscal year, officials said.
The revenue board has recently sent a revised development project proposal to the planning ministry for the consent of the ECNEC, they said.
As per existing schedule, the VAT Online Project (VOP) with a cost of Tk 556 crore taken to automate the VAT system is programmed to expire in June 2019, two years after the planned enforcement of the 2012 VAT law.
Of the amount, World Bank pledged to provide $60 million or more than Tk 480 crore in interest-free loan.
A high official of the revenue board said that the project would require an extension by further two years for successful implementation of the VAT automation.
VAT automation process including issuance of business identification number, submission of VAT returns and completion of other activities will be conducted under the Integrated VAT Administration System (IVAS), he said, adding that implementation of the new law will need to support the project for two more years.
The NBR will also have to bring changes in IVAS software making it compatible with the VAT Act 1991 which imposed VAT at multiple rates on goods and services as part of preparation of implementation of the 2012 law, he added.
The IVAS software was developed for uniform 15 per cent VAT in line with the new law.
The Vat online project formally launched in 2013 and Vietnamese firm FPT Information System is providing technical support including development of the software for implementing the project.
Officials said that the World Bank had also blocked $30 million from the fund due to delay in implementation of the new law.
A mission of the WB visited Bangladesh in mid-July and recommended for continuation of the automation process of the VAT system.
The multilateral lending agency so far disbursed $ 22.2 million and will disburse the remaining fund in line with the progress of VAT automation.
The VOP will need to amend the contract with both FPT and the WB.
They said that the WB would disburse at least $15 million after introduction of online VAT returns submission scheduled in October.
The revenue board has already decided to make nine-digit online BINs mandatory from January as a progress of VAT automation as existing 11-digit old BINs will be invalid from that time.
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