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In the first six months of the current financial year, the deficit in the value-added tax (VAT) sector stood at Tk 6,070 crore. During this period, Tk 64,737 crore of VAT has been collected, while the target was Tk 70,808 crore. According to related sources, lawsuits are one of the reasons for not meeting the target in VAT collection.
According to the National Board of Revenue (NBR), Tk 24,641 crore has been withheld only of VAT. 10,301 cases have been filed for this at various times. Every month, a large number of cases are settled, but more cases are being filed. Although the NBR has taken various initiatives to prevent litigation, it is not working.
Neither the short-term dispute resolution process nor the customs and VAT appellate tribunals under ADR or NBR, beyond the court-ordered process, can reduce the complexity of cases. Most of the cases are related to the disposal of VAT certificates. There are 3,559 cases in this sector, against which the government’s revenue is withheld to the tune of Tk 264 crore.
As of January this year, Tk 83 crore has been withheld against 27 cases in the Appellate Commissionerate, Tk 248 crore has been withheld against 202 cases in the Appellate Tribunal, and Tk 18,782 crore has been withheld against 3,486 cases in the High Court Division.
Besides, Tk 1,279 crore against 139 cases in the Appellate Division, Tk 1,532 crore against 1,582 cases in Musak 14.1, Tk 386 crore against 35 cases of Alternative Dispute Resolution (ADR), and Tk 2,063 crore against other 1,271 cases have been withheld. In all, against 10,301 cases, the revenue of Tk 24,641 crore is stuck.
According to sources, a total of 171 new cases were registered in eight sectors of VAT in January this year, in which revenue of Tk 279 crore was withheld. In the same month, 139 cases were disposed of, out of which revenue of Tk 68.5 crore was released (received by NBR). As of January 2024, 1,590 cases have been disposed of, resulting in revenue of Tk 2,759 crore.
Meanwhile, those concerned said that NBR is giving importance to installing Electronic Fiscal Device (EFD) and Sales Data Controller (SDC) machines to increase VAT collection. Three lakh EFD machines will be installed across the country in five years. If this plan is successful, revenue collection will increase.
Besides, the difference in VAT rates will also be reduced. Many sectors currently have different VAT rates, including 15 percent on retail and 7.5 percent on e-commerce, which will be reduced. Additionally, NBR has announced administrative reforms to increase VAT collection.
NBR has been given a target of Tk 4,30,000 crore revenue in the current (2023-24) financial year. However, revenue collection in the first six months (July to December) was only 38.5 percent of the annual target. At that time, NBR’s revenue collection target was Tk 1,88,856 crore. But in the last six months, NBR has not been able to meet the targets of any of these three sectors – imports, VAT, and income tax.
It should be noted that VAT has been introduced in the country since 1990. VAT came into force from July 1991 through the enactment of the VAT Ordinance. Basically, VAT evasion cases also started from that time.
Messenger/Fameema
