The new VAT law (Value Added Tax and Supplementary Duty Act, 2012) was passed by parliament on November 27, 2012. Following the enactment of the law, an implementation plan was drawn by the National Board of Revenue (NBR) with the assistance of the development partners. The basic plan was implementation of the law in an automated environment. It can be mentioned here that, the Value Added Tax Act, 1991, which remains in force now, is administered mostly manually.
The government has already announced that the new VAT law will come into full effect from July, 2016. With that end in view, the NBR is now taking preparations to create an automated VAT environment. It has undertaken a project titled "The Value Added Tax and Supplementary Duty Act, 2012 Implementation Project" or "VAT Online Project (VOP)" to make necessary automation.
The upcoming automated VAT system is basically automation of the government part of the system. The VAT-payers will be required to keep their VAT records as per the new VAT rules either manually or electronically as it is kept now. Their first interaction with the automated VAT system will be taking new VAT registration online.
The Registration Module of the automated VAT system (Integrated VAT Administration System-IVAS) is scheduled to become operational in early 2016 and the VAT-payers will be required to take new VAT registration online. It will be almost the same process as we took electronic Taxpayer Identification Number (e-TIN) recently. The VAT-payers will log in the IVAS system, put necessary information in it and get a printed new VAT registration certificate. It can be mentioned here that, there will also remain an option for taking new VAT registration manually. In that case, the VAT-payers will be required to submit necessary documents to certain designated places including VAT offices. The Central Processing Centre (CPC), which will be set up under the automated VAT system, will do the rest and issue VAT registration certificate.
The next interaction of the VAT-payers with the automated VAT system will take place at the time of submitting VAT return. As per the present plan, the new VAT law will come into full effect from July, 2016. So, return for the tax period of July 2016 will have to be submitted from August 01 to August 14, 2016. So, during this period the VAT-payers will be required to submit return online. They will be given a format to fill-in and send it to the automated VAT system (IVAS). They will be given password to have access to the system. The VAT Online Project (VOP) is developing a format for return submission where no attachment will possibly be needed. Only the information about his purchase, sale, payment etc. will come from him in his return. This information will be cross-checked by the system with some other systems like the customs system (Automated System for Customs Data-ASYCUDA World) and some other systems with which the VAT automated system is expected to be integrated. The system will identify the risky returns and send those for audit.
The VAT-payers will always have an option to submit return manually to some designated places including the VAT offices. Those who cannot file return online, will have the option of submitting hard-copy return. The Central Processing Centre (CPC) will collect those hard-copy returns, make soft copies and send to the automated VAT system. Thus, the data from all returns, both soft copy and hard copy, will be available to the automated system.
The automated VAT system will have a few components. The principal component will be the Data Centre. It will be located at the Bangladesh Computer Council (BCC), Agargaon. A Disaster Recovery Centre (DRC) is also being planned. There will be a nation-wide network. All VAT offices and all major stake holders will be connected with the network. All users will be given passwords to access the system. There will be a Central Processing Centre (CPC) that will process the registration applications, returns and other documents filed in hard copy. There will be a Call Centre that will respond to the queries of the people regarding any matter about VAT and the new system.
The NBR has selected vendor to set up the Data Centre and networks. The vendor is now working to set up the system so that VAT registration module can be made operational in early 2016 and return submission module in early August, 2016. A procurement process is now underway to field the vendor for Call Centre and Central Processing Centre. The Call Centre is expected to be made operational before the registration module becomes operational because soon after registration starts under the new VAT law, people will have many queries.
A Project Management Consultancy (PMC) firm has been appointed to implement the VAT Online Project. A good number of VAT officers are working with them. An automated VAT environment that will hopefully be taxpayer-friendly and revenue-friendly, will soon be in place.
Dr. Md. Abdur Rouf is First Secretary (VAT) and Deputy Project Director of the VAT Online Project, National Board of Revenue (NBR). -
