The tax collector has moved to remove the complexities over issuing the VAT registration after it found 80 per cent of the businesses have not updated their identification yet.
Some 20,000 businesses have updated their Business Identification Number (BIN) since July according to guideline under the new Value Added Tax (VAT) and Supplementary Duty Act-2012, officials at the National Board of Revenue said.
A total of 166,000 businesses, who obtained electronic-BINs until June 30, will have to activate those.
Many regular VAT payers are yet to update their BINs. The NBR used to receive around 32,000 returns from the businesses that paid VAT.
Some businesses have complained that they are not getting the updated BIN even after two weeks of submitting applications.
They alleged that VAT officials asked them to visit field offices to obtain BIN certificates, though they are supposed to get the certificates online.
On August 19, 2019, the revenue board issued an instruction to the field-offices to issue BIN within three working days once businesses submit applications.
BIN is mandatory for local businesses for import-export, submission of tenders and other major business activities.
To resolve the issue, the VAT wing sent a letter on Monday to all field-level VAT offices to get updated BIN and expedite the process of issuing BIN certificates online.
Md Jamal Hossain, a VAT member involved in implementation and monitoring, said the board has geared up effort to resolve the complexities and expedite the issuance of BINs.
"There are confusions in the field-level VAT offices about the issuance of BINs under the new law. Also, the delay in BIN approval process, slow speed of internet also made the process slower," he said.
The board has already intensified its monitoring of the field-level VAT offices to resolve those complexities, he added.
In the letter, the NBR has asked for the number of VAT-registered businesses under old and new law within the next three days.
Project director of the VAT online project Syed Mushfequr Rahman said fake BIN holders will not be able to obtain BIN under new VAT law as they have to furnish details of their businesses, including names of directors, bank account numbers etc.
"So far genuine businesses have obtained BINs under the new law. We expect to net around 0.1 million BIN holders under the new law," he said.
Earlier, businesses had obtained multiple BINs for different purposes including import export.
Mr Rahman said now those businesses will have to obtain single BIN against their National Identification Number (NID).
In an attempt to clean up the BIN database, the board introduced the instantissuance system without verification. Under the system, some 1, 65,000 businesses, out of 840,000 BINs, have obtained the fresh VAT registration.
However, the VAT offices have found that around 60 to 70 per cent of the BIN holders have provided either fake or partial information in the VAT registration form.
Taking advantage of the instant BIN issuance system, a number of commercial importers have availed tax exemption in the customs port under the guise of manufacturers.
To address the problem, the NBR in July last issued a public notice, requesting all businesses to update their VAT registration information again entering the VAT website.
Businesses will have to sign-up again on the site of e-BIN and fill out VAT 2.1 form in the line with new law and rules.
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