Finance Minister AHM Mustafa Kamal has underscored that the electronic fiscal devices management system (EFDMS) will not only accelerate the nation's revenue collection but also amplify it through improved transparency.
He said, “The whole world is now leaning towards automation. Automation is being used for VAT collection in many other countries including India. This will increase the speed of revenue collection.”
The finance minister made the remarks while addressing the inauguration ceremony of EFDMS as chief guest in the multipurpose hall of the National Board of Revenue (NBR) in Dhaka on Tuesday.
He added, “The size of the budget has now increased 10 times compared to when we started. Over the past 15 years, the government has generated numerous employment opportunities within the nation.
This surge in job creation has subsequently led to notable augmentations in both the budgetary allocations and VAT collections. Consequently, in my address during the 2019 budget presentation, I highlighted the imperative of automating VAT-tax collection processes.”
NBR chairman Abu Hena Md Rahmatul Muneem said through the implementation of this automation, traders will gain the ability to conveniently settle their VAT obligations from the comfort of their homes. Similarly, shop proprietors will be empowered to remotely access sales data for their establishments, providing insights into the transactions transpiring within their shops while they remain at home.
We believe that it will play a pivotal role in establishing discipline in VAT management at the business level in the country, he echoed.
He also said that NBR wants to establish itself as a smart VAT collector in the world through digitised VAT management and there is no alternative to improve VAT-tax payment and collection system when the country’s economy is expanding day by day.
Through digitization of VAT management, not only the revenue of the government will increase but also the country will move towards a sustainable economy, Genex Infosys Ltd acting managing director and chief executive officer, Shahjalal Uddin said.
EFDMS will help businesses increase productivity and ensure accountability, he added.
The initial plan is to deploy 60,000 devices in Dhaka and Chattogram within this fiscal year 2023-24 and to deploy another three lakh EFDMS machines over the next five years, he also added.
Later, the finance minister along with other guests officially launched the operations of EFDMS.
Finance Division Senior Secretary Fatima Yasmin, FBCCI President Mahbubul Alam, NBR Member (VAT Implementation and IT) Moinul Khan spoke, among others, on the occasion.
Earlier, NBR signed a memorandum of understanding (MoU) with the company on November 5 last year, aiming to boost VAT collection and curb evasion.
Mentionable, this was the first time it outsourced such a service from a local listed company, which was supposed to install three lakh EFDs within the next five years.
The revenue board in August 2020 experimentally introduced EFDs in areas under the VAT commissionerates in Dhaka and Chattogram.
NBR aimed at the time EFDs would be installed in 6,000 retail stores by June 2021 and 10,000 by the end of the year. It later repeatedly extended the deadline to meet the target but failed to do so every time.
However, the NBR installed 9,449 EFDs, including 431 sales data controllers (SDCs), statistics show.
There were 4,32,955 VAT-registered establishments in the country till April this year, 24 per cent more than the corresponding month last year, NBR data shows.
The revenue administration initially installed EFDs in shops free of cost but later charged merchants for it.
But due to the reluctance shown by traders, the revenue board took a different approach. It contracted out the installation of EFDs and also VAT collection to Genex Infosys with a target to mobilise an additional Tk 20,000 crore annually.