Federation of Bangladesh Chambers of Commerce and Industry has opposed the proposed amendments to the existing VAT rules in line with the suspended law and rules.
The apex trade body in a letter to National Board of Revenue claimed that the proposed changes in the Value-Added Tax Rules-1991 were simply replacement of the provisions of the deferred VAT and Supplementary Duty Act-2012 and its rules.
The FBCCI also demanded that the NBR form a high-powered joint committee to examine the technical and financial involvement, time and manpower required for customising the VAT online software in line with the 1991 VAT law and rules which have been developed in line with the 2012 law.
Representatives and experts from the FBCCI, the NBR, Bangladesh Association of Software and Information Services, information and communication technology ministry, Central Procurement Technical Unit of planning ministry and other relevant entities should be included in the committee, it said.
The FBCCI sent the letter to NBR chairman Mohammad Mosharraf Hossain Bhuiyan on February 18 in response of an NBR request for opinion on the proposed amendments.
Officials of the NBR have said that they are examining the letter.
The high-ups of the NBR will make the next decision on the issue after proper scrutiny, they said.
It will not be possible to introduce online VAT returns filing without the amendments, they said.
The trade body in the letter also criticised the revenue board for seeking its opinion after obtaining approval of the finance minister on the amendments.
The revenue board took the initiative to amend the 1991 rules to continue the VAT automation activities including introduction of online VAT returns submission.
Amendments of existing VAT rules are necessary to continue the automation process as the online VAT system has been developed in line with the new VAT act which has been suspended until July 2019.
The act was scheduled to come into force from July last year but the government deferred the implementation for two more years following strong opposition from business community including the FBCCI.
In the letter, FBCCI president Shafiul Islam Mohiuddin said that NBR automated the VAT system as per new VAT law.
VAT system and process under the existing 1991 law were not automated though VAT systems and processes of the two laws were completely different, he wrote.
‘It is not possible to digitise the existing VAT laws and rules by the automated VAT management system equipped with software and hardware that mainly support the new law,’ FBCCI said.
It is a difficult task to customise the software as per provisions of existing law and rules.
The NBR would have to assess the required time, cost, and manpower and negotiation process with vendor to customise the software, it said.
The proposed committee would look after issues, it said, adding that it would conduct study and make recommendations on technical and financial involvement in customising the software in line with the VAT law-1991, best options of customisation of the software as it will require re-customisation after introducing the new law from July 1, 2019, capacity of the existing VAT software to automate invoices of all VAT registered businesses.
The NBR should take the next steps to digitise VAT returns submission after taking recommendations from the committee and experts on ICT, VAT and procurement, FBCCI said.
The trade body also expressed its deep concern over errors and deviations the businesses are facing during online VAT registration process that stated March 2017.
FBCCI is receiving many complaints from businesses as they are facing problems and harassment in completing VAT registration online under the 1991 act as the system has been developed under 2012 law.
The complaints include absence of VAT registration cancellation process, lack of provision for obtaining VAT registration as cottage industry, recovering and amending Identification Account and problems in registering as turn over VAT payers and obtaining central VAT registration.
‘NBR should not take any initiative to automate the VAT system including introduction online VAT returns filing before addressing the problems,’ it said.
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