Survey on VAT payers’ satisfaction: Respondents give mixed reaction

Doulot Akter Mala | Published: April 17, 2019 10:05:03 | Updated: April 24, 2019 12:38:11

Tax officials declined to accept relevant papers from some 43 per cent of large VAT (value added tax) payers, a survey of the revenue board has revealed.

The papers that the tax payers produced were related to their VAT payments.

It also found 39.1 per cent of large businesses went through 'red tape' in the form of procedural repetition while submitting VAT returns.

However, more than 66 per cent of the respondents expressed satisfaction over the performance of officials and staff members at VAT offices.

A survey report styled 'Taxpayers' satisfaction under VAT and Supplementary Duty Act (VAT online project) implementation project' was released by the National Board of Revenue (NBR).

The Conjuratio Bangladesh Limited has prepared the report under the guidance of Prof Quamrul Ahsan Chowdhury of sociology at Dhaka University.

"Respondents faced multiple problems while submitting tax returns under the Large Taxpayers Unit (LTU)," according to the report.

"The most painstaking problem that the respondents (43.2 per cent) faced was the refusal to accept the documents accompanying the tax returns," it said.

For submitting tax returns under the LTU, businesses face procedural repetitions in the system.

Businesses viewed this as a part of 'red tape'.

They, however, expressed the hope that the authorities concerned would do whatever was needed to make return submissions easier and hassle-free.

An estimated 32,000 out of 8,40,000 VAT registered businesses now submit tax returns.

The survey team sampled some 50 out of 153 companies under the LTU. It used scientific sampling procedure with the approval of the NBR.

Of them, 50 companies or 38 per cent were registered as public limited, 42 per cent were private limited, 8.0 per cent joint ownership, 5.0 per cent private ownership.

The remaining 7.0 per cent were business entrepreneurs.

During the survey, taxpayers identified the difficulties they faced during tax registration.

Many complained of facing hassles during registration.

Some 14.29 per cent of those surveyed complained about improper assessment of their taxable income by VAT officials.

Even 28.0 per cent of the respondents talked about negligence of officials in discharging their duties like helping taxpayers in assessing tax returns, getting registration and relevant other activities.

Those who did not apply for tax returns stated different reasons for not submitting any applications.

The most common reason identified by 38.16 per cent of the respondents who did not file VAT returns was complexities involved in the process, the report said.

"Interestingly, over 14.08 per cent of the respondents were scared of filing tax returns because of a lengthy process involved in getting the refund," the report said.

Some respondents said procedural hassle was also a reason for not filing any tax refund application.

It shows VAT regime needs further improvement in its services to the tax payers to make it people's friendly.

The NBR should ensure proper measures to stop all sorts of hassles that the taxpayers face during payment of VAT, the report cited.

"VAT in Bangladesh could be made less regressive by making a distinction between luxury goods and essential goods. Supplementary taxes can be imposed on luxury goods," it said.

According to the report, the NBR should develop 'a Grievances Redress Mechanism' to mitigate the grievances of the taxpayers in a fair and ethical way.

Talking to the FE, VAT online project director Syed Mushfiqur Rahman said most of the positive outcomes came from the majority of the businesses in the survey.

It is a baseline survey that has been conducted to assess the existing taxpayers' satisfaction on the new law, he added.

Another such survey would be conducted later to review the findings, he said.

The new VAT and SD law is expected to come into force from July 01, 2019 with some amendments.


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