About 40% of shops in markets and shopping malls eligible for Value Added Tax, or VAT, have not yet registered with the Chattogram VAT Commissionerate, depriving the government of a significant amount of revenue.
VAT department officials said a 57% manpower crisis in the department is the reason why VAT registration could not be achieved to its fullest.
According to the VAT Act, VAT registration is a must for a company with annual turnover of Tk80 lakh.
Saeed Ahmed Rubel, deputy commissioner of the Chattogram Customs Excise and VAT Commissionerate, said the Commissionerate has eight divisions in Agrabad, Chattala, Chandgaon, Rangamati, Khagrachhari, Patia, Cox's Bazar, and Bandarban.
"We have identified 80 markets and 5,420 shops for VAT registration in these localities. But only 60% of these shops have come under VAT registration. As such, 2,164 shops in these markets are yet to register for VAT," he said.
"We are trying to register each eligible shop but there is a manpower crisis. Yet, we are encouraging traders to register at monthly VAT fairs," he added.
Commissionerate sources said shops in different markets were under the VAT net before 2019 and each shop used to pay a minimum of Tk18,000 in VAT a year.
According to the new directives of the National Board of Revenue, businesses have to file their VAT returns every tax term by the 15th of the following month.
The prerequisite for filing a VAT return is VAT registration. So far 29,801 companies have registered for VAT payment under the Chattogram VAT Commissionerate.
Business leaders said many traders are interested in registering for VAT but they are discouraged by the fragile business environment caused by the Covid-19 pandemic.
Syed Khurshid Alam, general secretary of the Chattogram district branch of the Bangladesh Shop Owners Association, said, "The business situation had not been good due to Covid-19. Under these circumstances, it was not possible to bring 100% of the shops under VAT registration. Still, we are urging traders to complete VAT registration."
Asad Iftekhar, president of the Sanmar Ocean City and Finlay Square Shop Owners Association in Chattogram City, told The Business Standard that owners of some shops in the market have changed due to business losses. These new owners are facing difficulties in collecting the required documents.
"Most shops in our two shopping malls have registered and the rest have been asked to do so," he added.
The Commissionerate has 894 sanctioned posts, of which 469 are vacant at present. Of these, 17 posts are vacant against 78 posts of first-class officers, 177 posts against 311 posts of second-class officers, 243 posts against 423 posts of third-class employees, and 32 posts against 37 posts of fourth-class employees, according to the Commissionerate.