Pay VAT, get rewards!

The National Board of Revenue (NBR) will reward 101 buyers every month from among those who pay value-added tax (VAT) while buying goods and services.

This prize will also be given to the buyers who have received VAT invoices for purchasing goods and services from business establishments in the city corporations and district towns where electronic fiscal device (EFD) machines have been installed. Winners will be selected through a lottery.

The winner of the first prize will get Tk1 lakh.

A guideline signed by Abu Hena Md Rahmatul Muneem, senior secretary of the Internal Resources Division and chairman of the National Board of Revenue (NBR), was issued on Sunday to this effect.

The guideline states that the award is being offered to establish transparency and accountability in VAT collection and to encourage buyers to collect invoices spontaneously. The NBR has enforced the guideline from the very day it was issued.

The NBR has been rewarding top VAT-paying firms every year. This year too, nine national and 131 district-based business institutions will be awarded with the best VAT payer award.

There was no separate award for individual VAT payers. From now on, they also will get rewarded.

However, it is not necessary to become the highest VAT payer to get this award. Any buyer can get the award only if they buy goods and services at any price and collect VAT invoices.

Within the following three working days of the lottery draw, the NBR will publish the number of the winning invoice or coupon along with the date through various media.

As per the guideline, buyers who collect invoices for paying any amount of VAT will have the chance to get this reward.

The NBR will give this prize to buyers through a random drawing of the invoices of the previous month on the 5th of every month. If there is a public holiday on that day, the lottery will be held on the next working day.

In addition to the first prize of Tk1 lakh, the second prize will be Tk50,000 to one individual, the third prize will be Tk25,000 to five individuals each,  and the fourth prize will be Tk10,000 to 94 individuals each.

The policy states that beholders of invoices issued from Electronic Fiscal Device Management System (EFDMS) against sold goods or services will be considered eligible for the award.

To receive the award, buyers must also apply to any NBR commissionerate or department or circle in the prescribed form. The application must be submitted within the last working day of the month in which the lottery draw will be held. Prize money will be given to the awardees by cheque.

The government has already made the use of EFD or Sales Data Controller (SDC) or Point of Sale System (POS) under Electronic Fiscal Device Management System (EFDMS) mandatory for selected business firms in all city corporation areas and districts of the country.

"VAT 6.3" invoices have to be issued from EFDMS against the sales of goods and services of these selected institutions.

The guideline states that if an invoice is issued, the information on the supply or sale of those goods or services and the amount of applicable tax will automatically go to the NBR's EFDMS database. This automated method will be successful if buyers receive the invoices.

The NBR has decided to reward buyers financially to motivate them to receive VAT invoices.

Ahsan H Mansur, executive director of the Policy Research Institute, told The Business Standard that various other countries have launched similar awards to motivate people to collect invoices.

South Korea introduced such an award for collecting handwritten invoices before the Internet system was strengthened, he mentioned, adding that the number of prizes and the amount of prize money were, however, more in that country. The country used to get a lot of applications following the move, he added.

"The NBR's prize money has gone low. It would have been better if the number of prizes had been higher too," he added.

It would have been better if buyers needed not apply, he continued. There would be no need for application if buyers' mobile numbers and NID numbers were also included in the invoice, he suggested.

"Buyers lose interest if there are complications."

Advising the authorities to fix the price of any product or service including VAT with it, the noted economist said there should be a provision to punish sellers if they do not give invoices to buyers.

The revenue board has formed a six-member "Lottery Draw Committee" headed by a member of the NBR (VAT Implementation and IT) to oversee the monthly lottery draw and supervise the overall management.

Initially, the NBR has installed 1,000 EFD machines at various business firms in Bashundhara City and Baitul Mukarram Mosque Market in the capital.

The regulatory authority has announced plans to install another 10,000 EFD machines by next June.

The NBR has started the process of purchasing another 100,000 EFD machines. It plans to install EFD machines at all shops including restaurants, hospitals and clinics in phases.