88% shops do not pay VAT, says VAT Intelligence
Three teams of VAT intelligence conducted the survey in eight markets in the capital Dhaka, Narayanganj and Savar on Thursday
Around 88% shops in Savar, Narayanganj and in the capital city do not pay Value Added Tax (VAT), according to a survey done by the VAT Intelligence Department of the National Board of Revenue (NBR).
During the survey, VAT intelligence found evidence that 904 out of 1024 business organisations have evaded VAT, said director general of VAT Intelligence Moinul Khan, in a press release.
Three teams of VAT intelligence conducted the survey in eight markets in the capital Dhaka, Narayanganj and Savar on Thursday in search of shops that do not pay VAT even if they do business, he said.
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Deputy director of VAT Intelligence and Investigation Department Tanvir Ahmed in Narayanganj, assistant director Munawar Mursalin in Dhaka and assistant director Malekin Nasir Akand led the survey in Savar. 42 intelligence officers joined the three teams.
Eight of the markets are Mark Tower, Cooperative New Market, Sayem Plaza and Al Hakim (Popular) Center in Narayanganj; Savar city center in Savar; Tropical Alauddin Tower, Uttara, RAK Shopping Complex, Uttara and Suvastu Nazar Valley, Badda in the capital city.
According to the survey, out of 120 VAT registered organisations, only 45 pay VAT above Tk5,000 per month. The remaining 75 pay VAT below Tk5,000. The survey found evidence that the amount of VAT is not consistent with store rent, employee salaries, electricity and other costs and profits of most businesses.
This field level survey also shows that some markets were established more than 10 years ago. Many run the businesses in the markets in the same period. However, the new VAT law has been implemented for two years.
According to the survey report, businesses outside the capital are more reluctant to pay VAT than the capital. VAT compliance in these areas is relatively low.
In most of the retail markets, VAT is collected at the rate of 5% and per month VAT is deposited in the government treasury by the 15th of the following month.
The survey findings will be submitted to the NBR. Based on this, the NBR will determine the strategy, VAT Intelligence DG Moinul Khan said.
The VAT Intelligence Department is conducting this special survey on the instructions of the NBR. For this purpose, four survey teams have also been formed by the VAT Intelligence and Investigation Department, he added.
