Waivers eat up 10pc of tax income: Kamal
The tax income would be 10 percent higher if the government includes the tax exemptions and waivers that it extends to various industrial and social sectors, Finance Minister AHM Mustafa Kamal said yesterday.
He spoke while handing over awards to nine firms operating in manufacturing, trade and services for paying the highest amount of value added tax (VAT) in 2017-18.
The National Board of Revenue (NBR) honoured the companies at an event at Bangabandhu International Conference Centre in Dhaka.
Square Formulations Ltd, Aristopharma Ltd and Rashidpur Condensate Fractionation Plant were honoured for becoming top VAT depositors in manufacturing sector.
The highest VAT-payers’ recognition was given to M/S Hamko Corporation Ltd, SC Johnson Pvt Ltd and Siemens Healthcare Ltd in trade category. In services sector, Chittagong Warehouse Ltd, Qatar Airways and Thai Airways were honoured.
The NBR honoured firms based on a 2005 policy that states that a firm would qualify if it pays 10 percent higher VAT than the previous fiscal year and has no tax dispute, pending cases or any tax and bank loan default.
Also, it recognised 135 firms for becoming top VAT-payers at district levels in the same year.
In Dhaka, it awarded 25 firms as top VAT-payers in manufacturing, trade and service sectors.
The minister also said the government spends the collected revenue to carry out development activities, including allocating funds for social safety net schemes to support poor and people lagging behind.
Kamal called upon people to pay tax saying that none would be harassed.
“If anyone complains of harassment to me, I will take actions instantly.”
Anyone can submit VAT returns online from today sitting at home, said Abdul Mannan Shikder, member of NBR’s VAT policy.
“We will provide EFD [Electronic Fiscal Device] to businesses by the end of January.”
Shikder said firms having more than Tk 5 crore in annual turnover will have to use software to keep accounts from the first day of January next year.
Businesses will have to collect software from companies listed by the NBR, he said.
Automation will reduce human interaction, reduce hassle and increase revenue, said Khondaker Muhammad Aminur Rahman, NBR’s member for customs audit, modernisation and international trade.
To increase collection from traders, electronic sales recorder—EFD—will be installed at 24 types of retails, Md Jamal Hossain, NBR’s member for VAT implementation.
The EFDs will be connected to a server at the NBR and customers would be able to know about the deposit of VAT instantly using mobile apps or by visiting NBR, he said.
This was the 14th year the NBR honoured the highest VAT-paying firms in an effort to increase collection from the segment.
Introduced in July 1991, the VAT has become the biggest contributor to the NBR’s revenue collection from FY1995-96 and has been maintaining the lead since then.
Yet, a significant amount of non-compliance prevails in the VAT system and there is substantial scope for increasing collection of the indirect tax, according to a World Bank report on methodology to measure the VAT gap in Bangladesh in 2014.
The study said the VAT gap, the difference between the expected VAT revenue and the amount actually collected, was 56 percent in 2012-13.
Zakia Sultana, commissioner of customs, excise and VAT Commissionerate Dhaka North, also spoke.
