Home ›› 13 Jun 2023 ›› Front
At a time when the National Board of Revenue (NBR) is under pressure to increase revenue collection, the initiative to install electronic fiscal devices (EFDs) has not been that successful, putting the NBR in trouble.
The NBR is still far away from reaching the EFD installation target.
The revenue board in August 2019 experimentally introduced EFDs in areas under the VAT commissionerates in Dhaka and Chattogram to boost VAT collection and curb evasion.
It said 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.
The NBR installed 9,449 EFDs, including 431 sales data controllers (SDCs), till May this year, 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, it added.
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.
The NBR signed a memorandum of understanding (MoU) with the company on November 5 last year. 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.
It has been eight months since the signing of the MoU but the NBR and Genex Infosys are yet to install even a single device. The NBR earlier said around 20,000 machines would be installed in the current financial year.
“We are planning to inaugurate the installation of 250 EFDs under the agreement by the end of this month. We do not how many devices Genex Infosys has imported,” said an NBR high official.
“There is a scope to install some EFDs this month, but we did not decide how many and when,” said Genex Infosys Company Secretary Md Mostaq Ahmed.
“We have already brought in 3,000 machines and are working to open letters of credit (LCs) for the other consignments as per the MoU,” he said.
He added that there is no clause in the MoU to install EFDs in the existing fiscal year. “The target was to set up three lakh EFDs within five years starting from FY24, including 60,000 every financial year.”
As per the MoU, the vendor will have to supply and install 20,000 EFDs or SDCs in each VAT zone in the first year, said officials during the agreement signing ceremony. But they did not clarify whether the target involved fiscal years or calendar years.
At the MoU signing ceremony, Moinul Khan, NBR member of the VAT wing, said the revenue board currently receives Tk 5,000 crore in VAT from retail businesses and the outsourcing is expected to help collect an additional Tk 20,000 a year.
He said the vendor will be paid around Tk 530 for collecting Tk 1 lakh (0.53 per cent).
Bangladesh Dokan Malik Samity in a pre-budget discussion requested the NBR not to install EFDs inconsistently and bring all businesses of a particular sector under the system at the same time.
Its President Helal Uddin said at the 43rd meeting of the Consultative Committee of the NBR, “If there are 500 shops in a shopping mall and VAT officials install EFDs in 10, only those will come under transparent VAT collection. This will create uneven competition among businesses.”
“Shoppers do not want to go to the stores having e-sale registers. They prefer buying from shops selling products without VAT.”
Federation of Bangladesh Chambers of Commerce and Industry President Md Jashim Uddin on different occasions said the NBR should contract EFD installation out to many companies so that monopoly will not be created and also the initiative will be faster and smoother with transparency.
