The National Board of Revenue (NBR) has contracted out the Value Added Tax (VAT) collection services to Genex Infosys Ltd., with a target to mobilise an additional Tk 200 billion annually from the retail businesses.
This is for the first time the NBR is outsourcing such a service from a local publicly listed company, which will install 0.3 million Electronic Fiscal Devices (EFDs) or sales data controller (SDC) machines in the retail outlets within the next five years.
The NBR signed a Memorandum of Understanding (MoU) with the company on Thursday at the NBR premises in this connection.
Addressing the MoU signing ceremony, NBR Chairman Abu Hena Md Rahmatul Muneem said the NBR outsourced the process amid challenges of making successful the initiative to install EFDs in the retail outlets.
"Every retail shop must issue invoices. VAT would be collected from the EFD-installed outlets if those shops have the invoice-issuing practice," he said.
The government would be able to reduce the existing VAT rates if the new system works properly, he added.
The chairman, however, pointed out that the process of outsourcing faced challenges and the new system would face such challenges in future too.
Dr Moinul Khan, NBR member VAT wing, said that currently, the NBR receives Tk 50 billion in VAT from the retail businesses and the outsourcing of EFD is expected to help collect an additional Tk 200 billion in a year.
He said the vendor will get charges of around Tk 530 for collection of Tk 0.1 million, or 0.53 per cent.
"We could not explore revenues from EFD as per its potentials. In this outsourcing process, all the buyers and sellers as well as the vendor and NBR would be benefited," he said.
The vendor will ensure installation of machines simultaneously to all shops or similar sectors in a market as businesses demanded earlier, he said.
They will keep machines operational for businesses so that no EFD machine can be kept idle, he added.
TIM Nurul Kabir, Adviser of the company, said they will give technological support to the NBR to work at the field levels.
As per the MoU, the vendor company will have to supply and install 20,000 EFD/SDC in each of the VAT zones in the first year. Within the five years of the contract, they will have to supply and install 0.1 million EFD/SDC in three VAT zones.
Dr Khan said the NBR awarded the contract as per the Public Procurement Rules.
The vendor will impart training to the people associated with the EFD/SDC and will be responsible for servicing. They will get service charges to send real-time information to the NBR server from the devices.
On August 25, the NBR inaugurated the EFD in its five VAT zones. Until October 2022, some 7, 397 EFDs and 435 SDCs installed in different retail outlets.
