Deputy commissioners of Dhaka Division and field level VAT officials on Monday pointed out a number of challenges including proper calculation of the VAT rate inclusive with the maximum retail price, misuse of the annual turnover limits by traders and non-existence of electronic cash registers at shops in the new VAT regime beginning on July 1.
At the first meeting of the Dhaka Divisional level committee on assisting implementation of the new VAT and Supplementary Duty Act-2012, they also said that the law would not be successful if the National Board of Revenue did not address the challenges.
Dhaka divisional commissioner Helal Uddin Ahmed presided over the meeting where deputy commissioners of the division, commissioners of VAT and income tax wings of the NBR and representatives from police, Bangladesh Bureau of Statistics and other government offices were present.
Helal said that installation of ECR was most important for ensuring maintenance of proper records of sales for payment of VAT.
It will not be possible to ensure VAT collection without proper accounts, he said.
Narayanganj DC Rabbi Miah said that consumers would have to pay more if the calculation of 15 per cent VAT inclusive with maximum retail price was not made clear to them as net incidence of VAT burden would be lower than 15 per cent in the new calculation system.
Rebate system will also create problems for both sellers and buyers if the NBR cannot make the system effective, he said.
He said that traders would make cash transactions to avoid VAT in absence of ECR machines.
Dhaka (East) VAT commissioner AKM Nuruzzaman said that they were facing four challenges related to implementation of the new VAT law after announcement of the budget.
The challenges are completion of online VAT registration within time, possible misuse of VAT-free annual turnover at Tk 36 lakh and annual turnover at Tk 1.50 crore for imposition of turnover tax by large traders and creating awareness among consumers to receive VAT challan.
Field offices, however, are working hard to address the challenges, he said.
Income tax commissioner for zone-4 in Dhaka Radheshyam Roy said that how the VAT wing would determine the annual turnover of traders and prevent VAT collection by VAT-free traders from consumers.
Rajbari DC Shawkat Ali said that the NBR needed to adopt a comprehensive action plan to protect consumers’ rights so that no trader can charge extra VAT from them.
In response, VAT Online Project director Rezaul Hasan said that the NBR would supply 50,000 ECR machines to traders by next two years to ensure proper records of sales data.
He also said that the NBR sought help from agriculture ministry in showing the list of VAT free products at shops so that traders cannot demand VAT on those products.
Large Taxpayers Unit (VAT) commissioner Matiur Rahman made a presentation on new VAT law.
Dhaka University business studies faculty dean Shibli Rubayat Ul Islam, Kishoreganj DC Azimuddin Biswas, Narsingdi DC Shubhash Chandra Biswas, income tax commissioner for zone-7 in Dhaka, VAT commissioner (Dhaka West) Shahidul Islam, among others, spoke at the meeting.