The NBR's VAT wing has already invited tenders to select three companies for three VAT zones for the task

The National Board of Revenue (NBR) has decided to let the private sector handle services related to electronic fiscal devices (EFD) for retail value added tax (VAT) collection in a bid to popularize it.

The EFD-related services would be provided by the private companies, having at least five years of working experience in some required fields.

The NBR's VAT wing has already invited tenders to select three companies for three VAT zones for the task. The tender applications would be accepted until January 16, 2022.

A senior VAT official said the private companies would sell EFDs to businesses and provide after sales services being connected with the NBR main server.

It would be the strategy of the private companies to popularize EFDs, as the more they ensure EFD-generated challans, the more they would get service charges.

Also Read - Targeted 10,000 EFDs by June but only 3,393 were adopted

Earlier, the NBR provided a total of 3,500 EFDs free-of-cost to the businesses.

Later, the VAT wing decided to discontinue the facility.

Each of the EFD machines costs around Tk20,000.

The private companies, that would be the lowest bidder, would be responsible for distribution, installation and maintenance of EFD and sales data controller (SDC) machines as well as monitoring operation of the installed machines to ensure collection of VAT and supplementary duty (SD) from different types of business entities through EFDs.

The companies applying must have a minimum five years of experience in human resource management in any government, semi-government or autonomous organizations, financial organizations, insurance companies or ICT sector.

Back in 2018, the National Board of Revenue (NBR) took an initiative to set up free electronic fiscal devices (EFD) in shops across the country to ease collection of taxes.

But only 3,393 shops in the country had EFDs as of early August, said NBR Member of VAT Implementation and IT Abdul Mannan Sikder.

This is a very low figure considering that the number of small shops alone in the country have reached 560,000, according to the Bangladesh Institute of Development Studies (BIDS). And according to the Bangladesh Shop Owners Association, there are some 2.2 million shops and establishments in the country, of which the NBR has registered only 350,000 for VAT payment.

Earlier this year, the revenue board itself had targeted installing 10,000 EFDs by June 30, but they could not achieve that target due to the pandemic.

Also Read - Businesses not willing to buy VAT machines at NBR’s price

As per the budget of the 2021-22 fiscal year, the government plans to collect Tk330,000 crore through NBR sources.

But a survey conducted by the VAT Intelligence Department from May 24 to May 31 this year found that 60% of shops in Dhaka do not pay taxes. And countrywide, the percentage of shops that do not pay taxes is even higher at 77.36%. 

The revenue board had initially made Electronic Cash Registers (ECRs) mandatory in 2009, and later ordered to replace those with EFDs on August 9, 2018. 

NBR issued an order in June 2019 to make the use of EFD compulsory in 25 sectors including hotels, restaurants, sweet shops, clothing stores, shopping malls, department stores, super shops, furniture shops, and jewellery shops.

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