In an effort to enhance revenue collection from the Value Added Tax (VAT) sector, the National Board of Revenue has sought information from all banks on the business firms whose annual transactions stood at Tk100 crore or more in any of the last five years.
The revenue board's Audit, Intelligence and Investigation Wing has already sent a letter to all the banks to this end.
The letter was issued on February 10, and the banks were asked to send all the required information on all business firms except banks, financial organisations, insurance and leasing companies by this week.
The move comes after the VAT collection registered a 21 percent shortfall in the first six months of the current fiscal year.
"To rein in VAT evasion, we have decided to scrutinise the companies with Tk100 crore transactions annually to find if there is any inconsistency between VAT returns and funds credited to banks. We have sent a letter to the banks as per a directive from the revenue board," said an official of the Audit, Intelligence and Investigation Wing, wishing to be unnamed.
According to the letter sent to the banks, a detailed scrutiny is required to ensure proper VAT collection from the country's big business firms.
In the first half of the fiscal year 2019-2020, revenue collection fell short of the target by a large margin. The collection faced a deficit of Tk31, 000 crore during the period.
The VAT sector witnessed the second lowest growth with a shortfall of Tk10,906 against the target of Tk51,996 crore.
Revenue board officials said a reduced domestic consumption coupled with a slowdown in export-import activities led to the low VAT collection.
Besides, the collection was not satisfactory because of a tax exemption for LNG and other products with the implementation of the new VAT Law. The sluggish business also added to the shortfall.
Mosharraf Hossain Bhuiyan, former chairman of the revenue board, said the revenue collection was much lower than the target as the audit activities were reduced to some extent.
"There are allegations that many organisations in our country do not submit money collected in VAT to the government exchequer properly after collecting that from consumers. The revenue board found such evidences in many cases," he added.
It is essential to speed up the audit activities which was slowed down owing to the national election, followed by the new VAT law that came into effect, he said.
The revenue board usually audits a business organisation when it finds it necessary. For that, it seeks info on a particular company mentioning its name. But this time, the revenue board sought information on many firms.
Because of the revenue collection shortfall, the government needs to turn to the banks to minimise the budget deficit. In the first six months of the current fiscal year, the bank borrowing has exceeded the annual target of Tk47,364 crore.