National Board of Revenue may introduce a more sophisticated electronic fiscal management system instead of conventional electronic cash register machine in the national budget for the next fiscal year 2018-2019 to make VAT collection from shops automated and prevent evasion.
Finance minister Abul Maal Abdul Muhith has already asked NBR to make preparations for introducing the system under which electronic fiscal device would be installed at shops.
Officials said that value-added tax wing of NBR would make installation of EFD mandatory in the budget through issuing a statutory regulatory order cancelling the previous SRO on installation of ECR in 11 types of shops.
VAT Online Project of the NBR already started preparations to introduce the new electronic fiscal management system under which all EFD would remain interconnected with the main server of the revenue board, they said.
Earlier in April, Muhith informed NBR that the EFD would be introduced from the beginning of the new fiscal year.
Hopefully, the new system would increase VAT collection without making any changes in VAT rates, he wrote to NBR chairman Md Mosharraf Hossain Bhuiyan.
According to the officials of the VOP office, EFD would be connected online with the NBR server.
Shopkeepers will be able to print VAT invoice containing details of transactions using the EFD after getting approval of VAT authorities. The printed VAT invoice will contain a unique authorisation code to be automatically generated by the central server of the NBR as proof of VAT payment.
A customer would know whether the VAT amount he or she paid to the shopkeepers went to the government exchequer based on the presence or absence of the code on the invoice, they said, adding that no shopkeepers would be able to generate the code in any way.
Currently, ECR machine was being used at only around 3,000 shops and these machines are not connected with NBR server leaving scope of manipulation of the machines to evade VAT, officials said.
NBR in 2009 made installation and use of ECR mandatory at shops in 11 categories including
hotels, restaurants, sweetmeat shops, departmental and general stores, jewellery, all shops at shopping malls in metropolitan areas, and medium and large wholesale and retail shops across the country.
But only a few shops installed the machine.
Of those who have installed the device, many keep it disconnected or shut down and don’t generate VAT invoice using ECR to evade VAT.
On the other hand, ECR system is not consistent enough with the deferred VAT and Supplementary Duty Act-2012 to make the country’s VAT system automated.
The new VAT law is scheduled to come into force from July 2019.
Under EFD, the tax authorities will also get alert message from the system if any shopkeeper keeps the device disconnected from the NBR server.
VOP would soon finalise the specifications for the device and float tender for development of the software, import of the device, they said.
It would take three to four months to make the system functional after completing the procedures, they added.
Want stories like this in your inbox?
Sign up to exclusive daily email
More Stories from Miscellany