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PUBLIC AWARENESS SHOULD BE RAISED TO PREVENT VAT EVAS |
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Dr. S M Jahangir Alam: VAT evasion is not decreasing. As a result, the realization is not happening as expected. VAT evasion continues even after the new law comes into force. There is a deficit in VAT collection at the local level. However, the amount collected at the import stage can be said to be good. In the first seven months (July-January) of the last 2019-2020 financial year, the VAT intelligence department has uncovered these frauds. In order to prevent VAT evasion, the specialized department of the National Board of Revenue (NBR), VAT Audit, Intelligence and Investigation Department has found these evasions. In addition to the raids, the intelligence department has been able to catch a number of VAT evasions through specialized audits and investigations. In the meantime, some organizations have also paid about Tk. 35 Crore by admitting fraud. The incidence of fraud is quite widespread. The revenue administration needs to look at this issue strictly. At the same time, judicial activities need to be strengthened. Due to NBR`s administrative weakness, lack of manpower, inefficiency and in some cases corruption, many evils cannot be caught. In this case, the concerned officer in charge of evasion also needs to be held accountable. Meanwhile, the target for collection of VAT at the import stage in the current financial year has been set at Tk. 45 thousand 554 crore 76 lac Taka. Till October 2020, Tk. 9 thousand 913 crore 99 lac Taka has been collected, which is 10.27% of the target for the same period. On the other hand, the target for VAT collection at the local level in the current financial year has been set at Tk. 82 thousand 192 crore 82 lac Taka. Till October 2020, Tk. 18 thousand 164 crore 41 thousand Taka has been collected. The deficit is 4.27% . Note here that the VAT Act, 1991 provides more than half of the government revenue if it is taken as import level VAT and supplementary duty. Under the law, everyone, big or small, has to pay VAT in some names. Such as- Generally, everyone below Tk. 80 lac has to pay 3% turnover tax, if a trader sells even 1 taka per year, he still has to pay turnover tax or VAT. While the law normally provides for a 3% turnover tax for everyone below Tk. 80 lac, there is another special power, through which the government can force anyone to pay 15% VAT irrespective of turnover. Turnover-whatever, there is an opportunity to issue provision of 15% VAT to all through notification. In that capacity/power, that is, under the 1991 Act, all manufacturing companies in the Dhaka (North), Dhaka(South) and Chittagong City Corporation area have to pay 15% VAT irrespective of turnover. Moreover, innumerable goods and services across the country have to pay 15% VAT irrespective of turnover. But the new law has been kept outside the scope of the tax altogether for small merchants. Moreover the definition of small merchants has been expanded extensively. Under the new online VAT, those who have an annual sales of up to Tk. 3 million or 30 lac will not have to register and don`t have to pay any kind of VAT in any name. And the new law does not give the government the power to make exceptions. As a result, the interests of small traders/merchants have been much more protected by the new law. On the other hand, medium enterprises/businesses are those whose total annual taxable sales are less than Tk. 8 million or 80 lac. They will be listed and will pay turnover tax at the rate of only 3%. Cigarettes and alcohol are the only exceptions for public health and social values. The only exceptions are for cigarettes and alcohol, taking into account public health and social values. Apart from these two sectors, any other medium trader/enterprise will get this opportunity. The law did not give the power to the National Board of Revenue to exempt them from this benefit. As a result certainly said that, The new law is going to open new horizons for small and medium enterprises that means SME sectors. Many are propagating that traders cannot take discounts/rebate as they cannot keep accounts. Moreover, accepting rebate is very complicated. This argument is totally illogical. The people who run the business are all very aware and fully aware of the surrounding situation, so it is conceivable that they can keep accounts. He could not do business if he could not keep account of purchases and sales. The concession/rebate was very complicated in the law of 1991. The new law of 2012 has made it much easier. You can take a discount only if you have a purchase invoice/challan (Bill of entry in case of import and tax invoice/challan at the time of local purchase). The traders/merchants will keep an account of the purchase and sale. The new law is to promote the complex will receive rebates, those laws and regulations themselves are requested to examine with attention. There is a kind of propaganda that VAT officials will increase harassment under the new law. However, under the new law, no official of any level can go to any taxpayer`s office without the written approval of the commissioner. At present almost all levels of officials can go freely. The new law will be fully digital. The taxpayer does not have to go to the VAT office for any reason except hearing. On March 23, 2017, the Finance Minister inaugurated the VAT online system. Since then, an average of more than 300 registrations are being made every day. Those who are talking about increasing harassment under the new law, if they register online, will admit that there is no scope for harassment in the online system. On 06/04/2017, the then President of FBCCI, Abdul Matlub Ahmed came to the National Board of Revenue and completed the online registration for more than three hundred enterprises/ businesses in just 5(five) minutes using the VAT online system in front of the media representatives. VAT evasion has become a common occurrence. Public awareness to prevent VAT evasion, people-friendly environment and appropriate enforcement of existing laws.
Author: Freedom fighter, Ex-Tax Commissioner & Director Bangabandhu Satellite
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