NBR inaction risks smooth run of online VAT system

Jasim Uddin | Published: 00:00, Sep 15,2019


The National Board of Revenue has made no progress in taking over the automated value-added tax system from the Vietnamese firm posing serious risks to run the system effectively after the contract with the firm expires.

The contract with the FPT Information System of Vietnam which developed the Integrated VAT Administration system (IVAS) is scheduled to expire in December 2020.

The revenue board on January 31 formed a seven-member technical committee to take over the system from the firm, maintain and operate it after expiry of contract.

The committee headed by NBR system manager Md Shafiqur Rahman was supposed to monitor the progress of IVAS, database management and networking and give opinion on required modification to make the system business-friendly so that the NBR could operate the system effectively in future.

Officials familiar with the development told New Age that there was no visible progress in creating expertise of NBR officials on technical know-how of automated VAT system and taking over the system from the firm even after seven months of formation of the committee.

FPT was now working on various modules of IVAS but the committee members were not even participating in the activities with the firm, they said.

NBR should take immediate steps to take over the system otherwise the automated VAT system would face a blow in future, they added.

In such situation, the VAT Online Project, responsible to implementation of the automated VAT system, was anxious over the future of the system due to lack of expertise and required experiences.

The project director Syed Mushfiqur Rahman, in a recent letter to the convener of the committee, said that there were possibilities of complexities in technology transfer of the IVAS system if steps were not taken from now as the modules of IVAS had been developing in the SAP platform.

Under the system, all areas of a business including financial accounting, asset management, sales, distribution, client management, VAT and other information would be integrated with the NBR IVAS server.  Mushfiq said that FPT would provide managed services during the tenure of the project.

Complete VAT system would face severe risks and there would be nothing to do if the VAT authorities could not achieve the required skills for taking over, maintenance and successfully operating the VAT online system before the expiry of the contract, he said.

He requested the system manager to take measures as early as possible as per the terms of reference of the committee. ‘Otherwise, the committee will have to take the responsibility of any problems to be created in technology transfer in future,’ he wrote in the letter.

The NBR in September 2015 signed the agreement with the FPT Information Systems to introduce the automated VAT system in the country.

NBR was implementing the VAT Online Project with a cost of Tk 690 crore to automate the VAT system.

Of the amount, World Bank pledged to provide $60 million or more than Tk 480 crore in interest-free loan.

Officials said the NBR had bitter experiences in running some of its automation activities, including Income Tax Management System of Large Taxpayers’ Unit (income tax), due to failure in taking over the system with proper technical expertise from the developers.

LTU failed to decode the ITMS programme, introduced in 2004 to digitise database of large-scale taxpayers, to extract the old data of taxpayers’ preserved in the system due to lack of technical knowledge, they said.

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