The National Board of Revenue (NBR) has beefed up its monitoring to check dodging of Value Added Tax (VAT) after detecting evasion of a huge amount of VAT by some firms recently.
Sources said the internal audit of the NBR's Large Taxpayers Unit for VAT (LTU-VAT) has taken steps to keep 64 large VAT paying firms under its scrutiny round the month to check VAT dodging.
Recently, the LTU-VAT detected evasion of VAT amounting to Tk 1,358.89 crore by 27 companies which did not pay the amount to the government exchequer.
"We're scrutinizing VAT evasion by 64 firms because they were previously involved with VAT evasion," said an NBR official.
Of Tk1358.89 crore, the NBR has been able to realise Tk 8.35 crore from the companies, said the official.
At present, eight NBR teams, led by two assistant commissioners and four inspectors, have been formed to scrutinize the companies to unearth the evidence of tax evasion.
"These firms have been asked to submit their reports revealing the amount of VAT they paid in the past five years," said a NBR source.
The firms have been instructed to submit financial and other related documents, such as production process, product and service information, commercial documents, bank transactions and audit reports.
As part of its move to stop VAT evasion, the NBR has started installation of Electronic Fiscal Devices (EFD) in business establishments in Dhaka and Chattogram.
EFDs will help increase VAT collection as these special devices will directly be connected to the central server of the NBR and the VAT will be deducted as soon as the buyer makes a payment against their purchases.
The NBR sources said currently only 3 percent of total VAT comes from domestic trade at retail and wholesale levels. The use of EFD will increase to 10-15 percent.
So far, EFDs have been installed in 3,096 institutions. The VAT money of the VAT payers goes straight to the government treasury through the EFD machine.
Electronic fiscal devices are widely used in many countries to check evading of VAT. An EFD is able to maintain account of business establishments and calculate VAT automatically. As part of VAT and Supplementary Duties ACT 2012, the NBR made the use of the device mandatory for 24 types of businesses, including hotels, restaurants, clothing stores and superstores.