The Upcoming Automated VAT Environment under the New VAT Law-Dr. Md. Abdur Rouf is First Secretary (VAT)

The Upcoming Automated VAT Environment under the New VAT Law

Dr. Md. Abdur Rouf

The New VAT Law (The Value Added Tax and Supplementary Duty Act, 2012) was passed by the Parliament on 27 November, 2012. Following enactment of the New VAT Law, an Implementation Plan was drawned by the National Board of Revenue (NBR) with the assistance of the development partners. The basic of the Implementation Plan was implementation of the New VAT Law in an automated environment. It can be mentioned here that, the Value Added Tax Act, 1991 which remains in force presently is administered mostly manually.

The government has already made announcement that the New VAT Law shall come into full effect from July 2016. To that end in view, the NBR is now taking preparation to set up an automated VAT environment. A project has been undertaken in the NBR titled “The Value Added Tax and Supplementary Duty Act, 2012 Implementation Project” briefly called “VAT Online Project (VOP)” to make necessary automation. People of the country, specially the VAT payers have enough curiosity to know the nature and extent of the upcoming automated VAT system.

The upcoming automated VAT system is basically automation of the government part of the system. The VAT payers shall require keeping 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 shall be taking new VAT registration online. It is expected that in early 2016 the Registration Module of the automated VAT System (Integrated VAT Administration System-IVAS) shall be made operational and the VAT payers shall be required to take new VAT registration online. It will be the almost same process as we took electronic Taxpayer Identification Number (e-TIN) recently. The VAT payers shall require logging in the IVAS system, put necessary information in it and get the new VAT registration certificate printed. It can be mentioned here that for facilitating the VAT payers, there will also be the options for taking new VAT registration manually. In that case, the VAT payers shall require submitting necessary documents in certain designated places including VAT offices. The Central Processing Center (CPC) to be set up under the automated VAT system shall do the rest and issue VAT registration certificate.

The next interaction of the VAT payers with the automated VAT system shall be while submitting VAT return. As per the present plan, the New VAT Law shall come into full effect from July, 2016. So, return for the tax period of July 2016 shall require to be submitted from 1 August to 14 August 2016. So, during this time the VAT payers shall require to submit return online. They will be given a format to fill-in and to 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 expectedly no attachment shall be needed. Only information of his purchase, sale, payment etc. shall come from him in his return. This information shall 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 shall decide the risky returns and shall send them for audit.

There will always be the option of the VAT payers for submitting return manually. In some designated places including the VAT offices, the VAT payers shall have option of submitting hard copy return who can not file return online. The Central Processing Center (CPC) shall collect those hard copy returns, make softcopy and shall send to the automated VAT system. Thus, the data from all returns both soft copy and hard copy shall be available to the automated system.

The automated VAT system shall have few components. The principal component is the Data Center. It shall be located at the Bangladesh Computer Council (BCC) Agargaon. A Disaster Recovery Center (DRC) is also being planned. There will be nation-wide network. All VAT offices and all major stake-holders shall be connected with the network. All users shall be given passwords to access the system. There will be a Central Processing Center (CPC) that will process the registration applications, returns and other documents filed in hardcopy. There will be a Call Center that will respond to the queries of the people regarding any matter of VAT and the new system.

To set up the Data Center and networks, vendor has been selected by the NBR. 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 Center and Central Processing Center. The Call Center 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 those will require to be answered.  

We are hoping that all these shall be done as per the above timeline. 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. So, we can hope that we shall have an automated VAT environment soon that will be taxpayer-friendly and revenue-friendly.     

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Dr. Md. Abdur Rouf is First Secretary (VAT) and Deputy Project Director of the VAT Online Project, National Board of Revenue (NBR). If you have any query regarding the New VAT Law, please mail to:  roufcus@yahoo.com