The National Board of Revenue (NBR) is facing a big challenge to rein in businesses with fake electric Business Identification Number or e-BIN while it’s VAT wing is leading up to complete automation in the next fiscal. In March 2017, the NBR made its VAT online server open for all businesses to avail instant e-BIN registration at ease as part of its effort to attract more for VAT registration.
The traders, through the system, could obtain e-BIN registration within a few hours after submitting application online. Some 1.62 lakh business entities obtained e-BIN registration until February 19 this year. But, in a recent investigation conducted by the exchequer, a big number of business entities have been found with fake e-BIN registration. Against this backdrop, the NBR stopped issuance of instant e-BIN registration last month. Sources said there would be a chance of serious fraudulences through fake e-BIN registration, resulting in huge government’s revenue losses. Seeking anonymity, a senior VAT official engaged in VAT online project told Bangladesh Post that they are now in a challenge to detect the fake entities and their fraudulences as they provided false documents and addresses while obtaining e-BIN registration.
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“However, the majority business firms still remain out of e-BIN registration as there are some 8 lakh manually VAT registered companies in the country. So we had no option but facilitating the businesses for obtaining instant BIN registration,” he said. NBR Chairman Mosharraf Hossain Bhuiyan, recently in a prebudget talk, said no company would be allowed to carry on their trading without having e-BIN registration from the next fiscal.
But the actual scenario is that most of the companies are still out of eBIN registration and many are fake among those who obtained it. A trader, to obtain the e-BIN registration, has to submit information about his or her title of business firm, address of business firm, address of branch office, business type, electronic Tax Identification Number (eTIN), amount of annual turnover, starting date of trading, and bank account number.
Besides, the traders also have to submit information about the directors of the company, including their National Identity Card or NID. Earlier, the VAT officials concerned provided e-BIN certificate after scrutinizing the necessary documents. Now if the fake BIN holding entities conduct any business activities, evading taxes, there is hardly any option to detect them and seize their activities.
However, the VAT official said that the NBR from now on is alert on such unscrupulousness and no fake company will be able to obtain e-BIN registration further and conduct business. NBR sources said some field-level VAT offices in August last year conducted inspections on a random basis on the e-BIN registered entities and found at least 16 types of irregularities with regard to online registration.
Sources said the Dhaka West Commissionerate for Customs, Excise and VAT, in August last year conducted a field survey on 310 eBIN registered firms in Mirpur, Savar, Ashulia, and Manikganj area to look into the authenticity of their trade information they provided, but they found the existence of only 150 firms. Besides, many traders here provided misinformation about their e-TIN, NID and bank account numbers also.
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Not only Dhaka west commissionerate but also other field offices have also detected similar anom alies, sources said. Another field office looked into about 6863 bank accounts provided by the businesses while taking their e-BIN registration but found only 4093 accounts correct, they said. NBR’s field level officials said such types of fraudulences might cause serious revenue losses of the government, as it paves the way of tax evasion.
As per the current VAT regulations, any company having its liaison offices can obtain only a central e-BIN registration to conduct their business activities. But many traders obtained plural registrations with providing falsehood with a view to conducting their business without paying taxes in proper manner, field officials believed. NBR Chairman recently in a programme told reporters,
“While sensing of misuse of e-BIN registration we stopped the automatic registration process,” adding that all companies now have to obtain VAT registration through providing correct information and no company would not be able to conduct their business activities without having e-BIN registration.”