The Financial Express

More than 40pc of VAT Online Project funds unspent

| Updated: July 11, 2021 10:17:48

More than 40pc of VAT Online Project funds unspent

Nearly 43 per cent or Tk 3.0-billion funds of the much-talked-about VAT Online Project (VOP) remained unspent even after the end of its tenure this June 30.

Officials said the project underspent the allocation as some of the planned steps were dropped due to the prolonged Covid-19 pandemic.

As per an Economic Relations Division's project-closing and verification report commissioned by Deloitte, some 90 per cent of the project task was done until June 30.

VOP senior officials said 13 modules have so far been developed to automate VAT administration while the remaining three would be completed by July 2021.

The National Board of Revenue (NBR) launched the project on May 09, 2014, with fund support from the World Bank and the Bangladesh government.

The Washington-based multilateral lender provided $60 million for the project under a 'programme for result' initiative.

The government earlier extended the project's tenure twice as some major modules remained incomplete.

Three modules-audit, litigation, and risk management will be completed by the NBR's IT (information technology) team with support from Vietnamese firm FPT that has developed the VAT online system.

The contract signed with the firm involving Tk 2.20 billion was until December 31, 2020.

The FPT will receive Tk 1.70 billion for its work under the project.

According to VOP officials, a post-warrantee contract has been signed with the Vietnamese contractor to support the system until March 2022.

VOP work has geared up in recent times as the incumbent project director himself developed 23 business processes of the modules instead of appointing a project management consultant, they said.

An estimated Tk 1.40 billion was allocated for consultancy purpose. The project spent only Tk 450 million by appointing a part-time consultant.

The VOP dropped training programmes for officials, campaigns, advertisements, software development for human resources, refurbishment of VAT offices, and appointment of a management consultant.

IT and administrative units have been formed to incorporate changes in fiscal measures for the fiscal year 2021-22 as passed through the Finance Act-2021.

Talking to the FE, project director Kazi Mustafizur Rahman said the VOP has been completed successfully despite multiple challenges amid this pandemic.

He said another three modules would be completed soon and then be prepared for testing after the preparation of manuals for audit and risk management by the NBR.

The major success of the project is to automate the VAT registration and return submission process.

In May, some 121,000 businesses or 67 per cent out of a total 241,000 BIN (business identification number) holders submitted their VAT returns online.

The modules completed under the project are tax types, registration, returns processing, revenue accounting, revenue management, taxpayer current accounting, refund and credit/adjustment, non-filing, debt management, taxpayer enquiry, document certification, and document management.

The VOP has partially completed the case management modules which is live now. It has also developed an audit module but not tested yet.

The modules for objection and litigation are still under development.

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