The tax authority has joined hands with the BIDA to attract foreign direct investment (FDI) helping investors obtain tax registration under a single roof.
Both the state agencies have reached a consensus regarding integration of the taxpayers identification number (TIN) issuance system with the one-stop service centre of Bangladesh Investment Development Authority (BIDA), officials said.
In a recent virtual meeting, they have also decided to expedite trading across border, automate tax system, speed up VAT refund and explore the possibility of quarterly VAT return submission.
The meeting was held to discuss ways on the improvement of the country's paying tax indicator in the World Bank's (WB) ease of doing business report.
Talking to the FE, director of BIDA Jibon Krishno Shaha Roy said the integration of TIN with one-stop service would help foreign investors get the TIN directly from the BIDA instead of the National Board of Revenue (NBR).
This will ensure one-stop service for foreign investors and help attract foreign investment, he added.
The World Bank index is considered a universally accepted comparative benchmark for business environment.
In the index, the country's score with regard to tax payment indicator has remained almost stagnant to around 56.1 in the last three years.
Although the country's overall ranking improved by eight notches last year, the rank of Bangladesh in paying tax indicator remained 151 in 2020, 2018, and 152 in 2019.
Both the authorities have decided to expedite trading across border by removing hurdles and implement the standard time line for export and import.
Currently, the import of goods needs at least five to seven days to get clearance from the port. Earlier, the NBR promised to bring down the time to 24 hours within 2022 by implementing the National Single Window (NSW) project.
For identifying the problems of exporters and importers, the BIDA and NBR decided to discuss with the stakeholders, including the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), Freight-forwarders' group and other associations of importers and exporters, garment accessories manufacturers' association and the Chittagong Port Authority.
In the meeting, the BIDA has recommended the NBR expedite the VAT refund process and popularise online income tax return filing.
The BIDA also recommended the NBR explore the possibility of introducing the quarterly VAT payment system to reduce time and cost of the business.
Currently, businesses have to submit VAT returns every month.
There are four sub-indicators of paying tax indicator in the World Bank report, including payments, time, total tax and contribution rate and post-filing index.
Currently, taxpayers have to make 33 payments to the NBR each year in Dhaka and Chattogram while the number is 26.7 in South Asia and 10.3 in OECD high income country.
The process of tax payment needs 435 hours per year in the country while it is 273.5 hours in South Asian countries and 158.8 hours in OECD high income countries.
Taxpayers contribute 33.4 per cent of their profit as tax in Bangladesh while it is 43.9 per cent in South Asia.
For improving the score of paying tax indicator, both the NBR and BIDA decided to discuss with tax consultants, advisors, auditors and the Federation of Bangladesh Chamber of Commerce and Industry (FBCCI).
They have also decided to lay emphasis on the efficiency and user-friendliness of online tax management system.
A senior NBR official said the development in the tax system has not been highlighted in the World Bank report while the neighbouring countries are actively pursuing that.
Meanwhile, the WB has suspended the publication of doing business report after allegations raised by some countries on its ranking.
BIDA officials said this year's report will be delayed as the global lender is conducting investigation on the alleged irregularities involving the 2018 and 2020 surveys.