Streamlining of VAT (value added tax) collection through installing electronic fiscal devices (EFD) has become slow as the small traders are unwilling to pay Tk 20, 533 for installation of device at their business establishments.
Sources said small traders in the capital and business city Chattogram are not willing to buy EFD at Tk 20, 533 as they are already facing losses due to Covid-19 pandemic.
"We cannot afford to spend Tk 20, 533 for the VAT paying machine right now because we are still struggling to overcome the fallouts of Covid-19 pandemic that broke out in the country in March, 2019," said a small trader in the capital city's Hatirpool area.
The National Board of Revenue (NBR) has already planned to install 10, 000 EFDs in business establishments in Dhaka and Chattogram in the current financial year (FY22).
"Installation of EFDs is very important for VAT collection properly 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," said an NBR official.
NBR sources said the VAT officials will decide in which organization the machine will be installed. If owners of the business establishments do not pay the EFD price right now, it will be collected as arrears.
So far, the NBR has provided free VAT machines to 3,500 companies. But now NBR will not give the machine for free. Chinese company SZZT-KMMT-SYNESIS-EATL has been entrusted with the task of supplying JV VAT machines.
Recently, the NBR fixed the price of EFD machine at Tk 20,533, which traders can pay in one-time or on three installments. However, within one month of installing the machine, Tk 10,533 has to be paid in the first installment. In the next two months trader can pay Tk 5,000 in each month.
In addition to EFD, Sales Data Controller (SDC) machines will also be installed. NBR has also fixed the price of each SDC at Tk 24,596. In that case a trader has to pay Tk 12, 596 in the first month. In the next two months, the traders will become the owners of the machine by paying Tk 6,000 in each month.
There are about 350,000 shops in Dhaka metropolis and the total number of shops in the country is about 25 lakh. In addition to shopping malls, small traders are doing business in remote areas, according to the Bangladesh Shop Owners Association (BSOA).
"We do not accept this price. The price of this machine in the market is not so high, it is available for Tk 8000-10000. Besides, the NBR did not fix the price after discussing with the traders," BSOA president Helal Uddin said.
But NBR VAT member Abdul Mannan Sikder said the government is giving VAT machines to traders at the purchase price. At first the device was given for free but now it is not possible, he said, adding that besides, the traders will be the owner of the machine and if they pay price for it and they will take care of the machines.
Helal Uddin said small traders of Old Dhaka will face problem in using VAT machine because owners of these small business establishments are less accustomed to accounting. Many of them keep accounts in tile books, he added.
Abu Motaleb, a leader of Old Dhaka businessmen and general secretary of Bangladesh Businessmen Unity Forum, said that almost all the small businessmen of Old Dhaka have suffered losses due to Corona. The rent of their shops and the wages of the employees are in arrears, he said, adding that now if they are forced to pay Tk 20,533 for an EFD, they would not have any option but to close the shops.
Regardless of the trade, it is now mandatory to install EFDs in 24 types of businesses. These include sweet shops, restaurants, fast food shops, residential hotels, beauty parlours, clothing showrooms, department stores, super shops, laundry, jewelry or jewelry stores, community centers, gyms, household appliances, electrical and electrical (Wholesale and retail) significant.
According to NBR, each VAT commissionerate will be allotted a certain amount of VAT machine. Field VAT officials will go to different malls or neighborhoods to decide which shops will need VAT machines. Later, a representative of vendor organization SZZT-KMMT-SYENESIS-EATL JV will visit the shop and install VAT machine. The NBR has to be informed about the number of EFD machines installed in the shops every month.