3 years ago

VAT reg display: Non-compliant firms face penalty

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Businesses and shops may have to face penal action for not displaying VAT registration certificates on their premises from now on.

The Value Added Tax implementation wing of the National Board of Revenue or NBR ordered the field-level officials on Tuesday to ensure the compliance.

The wing has sent the instruction to all VAT offices across the country pointing out the reluctance of taxmen to enforce official order while non-compliance by businesses to display the registration document.

The VAT registration or Business Identification Number or BIN is mandatory for operating almost all major business activities, except for micro enterprises.

According to the section 13 of the VAT and Supplementary Duty Act-2012, every business will have to exhibit the VAT registration certificate or turnover certificate or attested copies of those in a visible place of its premises.

In a letter, VAT member Mohammad Jamal Hossain said the non-compliance of the provision of the VAT law is a punishable offence.

"It has been learnt from dependable sources that many of the VAT-registered businesses are not complying with that provision," he said.

Despite several instructions, the VAT officials do not seem to pay lower-than-expected attention to ensure the compliance, he added.

In a recent meeting, the NBR chairman Abu Hena Md Rahmatul Moneem also expressed his dissatisfaction over the insufficient compliance and instructed officials to prioritise the enforcement of the legal provision.

In the instruction, the VAT wing also asked the field-level officials to motivate the businesses through campaign, conduct zone-wise or circle-wise survey and visit the VAT-registered businesses premises.

He said the high-ups of NBR may go on surprise tours to the jurisdiction of any VAT zone to conduct a physical examination, it said.

The VAT member instructed the VAT commissioners to update the NBR on the matter by July 16.

Talking to the FE on Wednesday, Mr Hossain said they will focus on ensuring compliance in the new financial to increase revenue collection.

"At first, we will conduct survey to make businesses aware of the provisions of the law. Penalty would be imposed later in case of failure to motivate them," he added.

It would be easier to identify the VAT registered and non-registered companies if the businesses display certificates on their premises, he said.

Consumers will feel comfortable as the VAT registration of a business proves that their paid VAT would be deposited with the public exchequer, he noted.

The VAT officials can impose penalty up to Tk 10,000 in case of failure of displaying the VAT registration or BIN certificate.

However, Solaiman Parsee Faisal, a businessman of old Dhaka and a director of the Bangladesh Pipe and Tube well Merchants Association, said the VAT authority can work together with businesses associations to ensure the compliance

He alleged that some of the staffers of VAT offices take bribe from the dishonest businesses on a regular basis and bypass proper enforcement of the legal provision.

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