The National Board of Revenue (NBR) has taken up an initiative to coordinate its auditing activities with the commissionerates concerned and the VAT audit intelligence and investigation department to avoid double auditing on VAT collecting firms.
The NBR on July 7 published an official order to effect charter of functions for its VAT audit intelligence and investigation directorate which is responsible for conducting audit and intelligence activities on the VAT collection companies to counter VAT evasion.
The order was signed by NBR member (VAT audit and intelligence) Abu Faisal M Shahriar Molla with effect from July 1.
The department will prepare a list for auditing firms and send the list to the commissionerates so that the latter can prepare work plan separately to avoid double auditing, according to the charter.
The department will conduct intelligence activities to collect information on irregularities committed by VAT registered companies, cottage firms and turnover listed companies.
After collection of intelligence information, the department will send the information to the commissionerates seeking necessary actions in this regard, the charter said, adding that the department will also have to conduct legal activities to ensure compliance in overall VAT collection system.
According to the new charter, the department can audit any firms anytime based on intelligence information or order from the director general of VAT intelligence department.
The audit and intelligence department will conduct three monthly audit activities and inform the commissionerates by 15 of every July, October, January and April so that the latter need not audit the firms twice.
After having the audit lists, work plan would be prepared so that double auditing can be avoided.
Following investigation, the department will recommend for necessary action on tax evasion and irregularities.
The charter also made the audit and intelligence department responsible for sending a monthly intelligence report to NBR headquarters, and serve recommendations to all commissionerates and NBR headquarters to counter tax evasion.
Based on the information collected, the department will also send recommendations to NBR for taking legal reforms. It was also made responsible for sending three monthly and year wise report to the NBR headquarter.NBR to avoid double auditing on VAT paying firms.
Earlier at a briefing, NBR chairman Nojibur Rahman said the board has targeted 55% revenue with its VAT wing within shortest time by exploring its potentiality.
It is widely alleged that many businesses collect vat from customers, but do not deposit the money into government revenue, sources said.
Usually, the department carries out audit as part of its regular review on random basis and identifies the tax evasion activities.
According to the charter, the department will select companies based on statistics, manual and documents prepared by NBR and will conduct auditing on them when required.
The department will also prepare a category wise information storage system for companies registered or eligible for registration, and companies at risk on vat collection to conduct risk management activities.
Expressing frustration over low number of VAT returns submitted by business houses, finance minister AMA Muhith on Sunday said: “Only 60,000 business firms currently submit VAT returns although the number of eligible companies should be at least 3-6 lakh.”
NBR officials said that a good number of private companies have been evading VAT (value added tax) despite making huge profits.
Currently, the VAT audit intelligence and investigation department cannot work extensively on
tax-related irregularities, and VAT evasion due to lack of manpower, officials said adding that coordinated efforts between the commissionerates and the department can help increase collection of VAT from different companies.