E-filing made mandatory for 11 goods and services

The National Board of Revenue (NBR) has made online VAT return filing mandatory for 11 goods and services to improve compliance, boost revenue collection and bring VAT documentation under a digital system.

Eight are from the manufacturing sector -- cigarettes, mobile phones, medicines, beverages, cement, MS products, tiles, and paints and varnishes. Three are from the services sector -- insurance, banking and non-banking financial services, and mobile financial services.

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A general order to this effect was issued by the VAT department of the NBR yesterday.

Nearly 40 percent of the revenue board’s total VAT collection comes from these sectors, according to the NBR.

The measure is aimed at bringing the submission of relevant VAT documents under a digital system.

Under the order, if a registered person is directly involved in supplying any of the listed goods or services to another person, the requirement will also apply to that person’s activities.

Any previous order issued by the NBR relating to the mandatory online submission of relevant documents will be considered cancelled once the new order comes into effect.

However, the NBR will retain the authority to amend the list of goods and services covered by the order whenever necessary. The order took effect immediately.

The move comes as the tax authority expands digital processes for VAT administration amid lower VAT collection, seeking to bring more business transactions and compliance activities under online systems.

Md Azizur Rahman, member (VAT Policy) of the NBR, said the move to bring VAT returns online was aimed at gradually incorporating all sectors into the e-VAT system.

“We want to bring all sectors under digital coverage. We are doing it gradually,” he said, adding that filing is not yet mandatory for those outside the listed sectors, as there is no official gazette and commissioners are simply taking the initiative.

The NBR is initially bringing around 11 sectors under mandatory online filing, citing a provision under Section 64 of this year’s budget.

“Among them are production sectors -- many already submit online, but we will bring the entire sector fully online. We may bring another 10 sectors next month, and gradually cover as many as possible by June,” he said.

“At present, we receive around 60 percent of returns online on average, but the remaining 40 percent isn’t coming in. For the sectors we’re bringing in now, submission will have to be 100 percent online. The VAT department will ensure that through whatever method is necessary.”

Faysal Ahmed, a chartered accountant, said the move may boost online VAT return filing and strengthen the NBR’s capacity for VAT compliance and data verification.

“As a result, businesses will need to ensure proper reconciliation and data accuracy among their sales, purchases, input-output VAT and VAT return information. This will play a positive role in the government’s VAT collection,” he said.