The Economic Relations Division (ERD) has found poor implementation of the Disbursement Linked Results (DLR) on major components of the VAT Online Project (VOP) that may affect getting its remaining fund from the World Bank (WB).
Some 50 per cent or US$ 30 million of the WB's fund disbursement depends on four DLRs under 'VAT implementation on track'. The WB's fund disbursement is based on progress of each of the DLR components.
Of the four DLRs, the project has achieved the highest 65. 28 per cent progress on 'VAT registration set up', according to a letter of the ERD.
DLR on 'VAT IT collection system set up' has achieved 35.37 per cent progress. However, there is no progress on 'VAT refund system', while assessment of 'VAT audits system' remained untouched.
The ERD additional secretary Md Shahbuddin Patowary, who is also project convener of the Support Implementation of the Revenue Mobilisation Programme for Results (SIRMPR), in a recent letter to the National Board of Revenue (NBR) chairman, informed about the dismal scenario of VOP.
He requested the NBR to take steps to expedite the process of VOP implementation to get the WB's full fund worth $ 60 million within the project tenure.
The project started in July 2014, and is scheduled to expire on December 30, 2020. However, the WB's SIRMPR technical assistance project for VOP is scheduled to expire on June 30, 2020.
In the remaining time, it would be possible to conduct maximum two assessments of the DLR, the ERD secretary wrote in the letter.
The WB has so far released $ 35. 82 million fund for the project on the basis of assessment report of its audit firm Deloitte Touche Tohmatsu India LLP. The firm submits report to the ERD, verifying the progress of VOP in every six months.
The whole VOP project has been divided into different phases of DLR to assess progress of its each component. VOP is the WB's first Program-for-Results Financing (PforR) project in Bangladesh.
Meanwhile, another letter of the ERD, on Sunday, said the WB's audit firm for VOP declined to get involved in the task of developing business process for the project.
Earlier, VOP requested Deloitte to assist it in developing business process for audit, risk management and other major areas of automated VAT system.
Deputy Head and Project Coordinator of SIRMPR project Dr Delwar Hossain conveyed the firm's decision to the VOP project director in the letter.
The ERD letter said the firm claimed that it would be a 'conflict of interest' to get involved in the development of business process for VOP, and later audit it.
"It is the responsibility of VOP, not the audit firm, to develop business process."
The terms of reference of the agreement between the ERD and Deloitte will require amendment to allow the latter prepare the business process, he wrote in the letter.
The contract with Deloitte is scheduled to expire on June 30, 2020. The contract period may also require extension to assist VOP to develop the business process, he added.
The ERD requested the NBR to follow the Public Procurement Rules (PPR) to finalise the business process, prepared by the VOP project management consultancy (PMC).
VOP held a meeting with Deloitte on January 9, and discussed about development of refund and appeal module.
After the meeting, the VOP officials requested the SIMPPR project consultants to inform Deloitte about its assistance in development of business process.
