The National Board of Revenue (NBR) is set to rescind its agreement with Genex Infosys PLC, a private IT firm, responsible for installing and managing the Electronic Fiscal Device (EFD) system.
This decision comes after Genex Infosys PLC failed to deliver the anticipated results since the project’s launch.
The ITeS company was awarded the contract in 2022, with the mandate to install and run 3,00,000 EFDs and Sales Data Controller (SDC) devices across Dhaka and Chattogram cities for the following five years to enhance Value-Added Tax (VAT) collection from retail sales, according to the open tender requirement.
The project was launched with the aim of tracking transactions and ensuring accurate VAT collection from 25 types of businesses.
However, the NBR is now reassessing its partnership with Genex Infosys due to the company's underperformance. Frustrated by the project's lack of successful implementation, the revenue board is planning to rescind the agreement, citing Genex's failure to install the required number of EFDs, violations of NBR’s import regulations, and alleged harassment of business firms.
Only 15,995 instead of 30,000
Under the agreement, Genex Infosys was mandated to install 30,000 EFDs across an equal number of businesses in Dhaka and Chattogram by June of this year.
However, the company managed to install only 15,995 devices, with 8,000 of them in direct violation of NBR's requirements as well. Due to this breach of contract, the NBR has decided to issue a show-cause notice to the company.
Commenting on the matter, Genex Infosys PLC Head of Corporate and Regulatory Affairs, Abu Jahid Parag, told The Business Post, "We have not yet received any official communication from the NBR regarding the cancellation of our agreement.
“We remain actively engaged in developing the infrastructure and technology solutions to automate revenue generation at the retail level through the EFDMS project,” he asserted.
"The NBR has established certain pre-conditions for the project's successful advancement, which we are currently addressing in ongoing discussions with the NBR to ensure a more effective and successful implementation," Parag added.
Tk94cr already spent
Earlier, the company sent a letter to the interim government's Finance Adviser, Dr Salehuddin Ahmed, seeking state support to continue the project.
The letter, a copy of which was obtained by The Business Post, cited the non-cooperation of NBR officials and difficulties in opening Letters of Credits (LCs) due to the dollar crunch in the local market as key challenges in importing the devices.
In the letter, Genex Infosys also requested an import duty waiver to help achieve the project's expected success. Additionally, it claimed to have already spent approximately Tk 94 crore on training officials and businesses, but has yet to receive payment from the NBR.
Blame shifting
However, NBR officials have dismissed the claims of non-cooperation, asserting that the company is making excuses for failing to complete the project on time.
"Training and the provision of free devices [testing samples] were clearly outlined in the agreement, and the company was fully aware of these obligations when they signed the deal. Now, they're trying to shift the blame for not meeting the terms," said an NBR official, speaking on condition of anonymity.
Meanwhile, the newly-appointed NBR Chairman Md Abdur Rahman Khan has already directed his officials to find out alternative solutions to EFDs as the system fails to meet expected success in collecting VAT from the retail level.
