NBR EFD project moves at snail’s pace

The revenue authority’s goal to install Electronic Fiscal Devices in business entities to track online transactions and ensure VAT is yet to be met even two years after such an effort was put in place.

The much-talked-about e-sale registers promoted by the NBR failed to show up at retail stores in cities at a steady pace.

The tax authority identified 24 types of shops and service providers to set up the e-sale registers in a bid to ensure openness in their sales transactions.

But so far, only 3,393 shops have been found to have incorporated with the system from August 2019 to date.

According the NBR data, in the last two years, its goal to put up Electronic Fiscal Devices (EFDs) has not been achieved.

NBR Chairman Abu Hena on Tuesday at a programme said, “Installation of EFD devices was made mandatory for all retail shops having yearly turnover above Tk 50 lakh.”

He said the revenue administration was working to trace the eligible business entities for the device and connect them with the VAT automation system to ensure transparency and accountability in the transaction mechanism.

An EFD is a device which procures the digital record of every sale and instantly sends data to a central server automatically so as to prevent any chance of manipulation.

EFD services were officially launched on August 25, 2019 when the target was set to furnish businesses with 10,000 EFDs and SDC (Sales Data Controller) machines by June 2020, but the authorities could not make it as the devices could not be imported during the period due to the pandemic.

In FY 2020-21, the objective was to set up 10,000 EFDs, but due to various reasons including the pandemic and subsequently intermittent shutdowns, only 3,393 could be made till June 2021, which is only 30 per cent of the target.

The remaining 6,606 such devices could not be placed within the stipulated time in the last fiscal.

Likewise, the tax authorities are yet to start their work to insert EFDs in shops and stores in the first three months of the current fiscal — July, August and September.

But the NBR officials say they have an aim to bring at least 6000 shops under the digital VAT network.

Talking to The Business Post a senior high official at the NBR, said that since it (EFD) is a new system, it will take time to be adapted.

Asked why the target of instituting the machines has been reduced, she replied that, “Due to change in the policy, we had to revise the number. But, hopefully we will begin installation process soon.”

At present, there are more than two and a half lakh business entities which have VAT registrations, but in two years only about 3,393 institutions initiated the new VAT machines.

The NBR made it mandatory to use the EFDs for 24 types of businesses, which have an annual turnover of more than Tk 50 lakh.

As a result, most VAT-registered businesses have to be brought under the EFD network.

Wishing to remain unnamed, an official of VAT Online Project told The Business Post that the ongoing activities were disrupted due to the Covid-19 situation; apart from that, the tender process witnessed some intricacies that are now being dealt with.

“But hopefully, EFD installation would take place in December this year,” he said.

While talking to The Business Post, NBR member Abdul Mannan Sikder (VAT wing) claimed that, “The setting up of EFDs has already started. Initially, we provided the machines free of cost. Now we are charging for it, but providing a free installation service.”

“We have already started the process and are trying to automate the whole thing. There will be good results soon.”

The NBR in a programme on Tuesday said an EFD would cost Tk 20,500.

Meanwhile, traders have objected to setting up the EFD equipment, saying if there are 100 shops in a market, VAT officials put up e-sale registers in only 10 shops where the product prices go up as they charge VAT from customers who generally want to fight shy of Value Added Tax.

“We want that EFDs be installed evenly in all shops and shopping malls,” they opined.

Bangladesh Dokan Malik Samity president Helal Uddin said if there are 500 shops in a shopping mall and VAT officials fix up EFD equipment in 10 shops, then VAT would be transparent only in those 10.

“Shoppers don’t want to go to those stores having e-sale registers. They turn to those shops selling products without VAT,” added the businessman.

After the introduction of VAT law in the country, a Chinese contractor was ordered to import VAT machines, but due to the outbreak of corona at the end of 2019, the importing issue was put on hold.

In April 2020, 100 machines were brought from China and installed experimentally four months later.

Of the 100, 80 were placed in different shopping centres in Dhaka and the rest in the port city Chattogram – on a pilot basis.

Later, restrictions were imposed due to Covid-19.

Businesses ranging from hospitality and sweetmeat stores to clothing, furniture and electronics will have the EFDs set up.