• Monday, Nov 29, 2021
  • Last Update : 02:19 am

‘Only cash please’

  • Published at 09:28 pm October 25th, 2021
cafe-restaurant
Representational image. Many restaurants are not following government instructions which mandate that VAT for products should be included in the product prices, not charged at check-out Syed Zakir Hossain/Dhaka Tribune

Cash-only transactions take over Dhaka restaurants

Debit card transactions dropped by about Tk850 crore in August from the previous month despite widespread adoption of cashless transactions across the country amid Covid-19.  

Compared to May, debit card transactions dropped by almost Tk1,518 crore or 6.8% in August, which some experts say is due to the end of lockdowns and the mass vaccination campaign.

So, are debit cards just losing popularity?

Cash-only restaurants 

Many of the major chain restaurants and eateries of the capital such as Kacchi Bhai, Sultan’s Dine or even bars such as DPL, have stopped accepting digital payments. 


Also Read - NBR: VAT must be in price tag


Although a few of these places are posting notices at the entrance, others are harassing customers after they have already ordered the food. 

Asked about the reason for accepting cash-only payments, the cashiers or waiters mostly blamed it on “a software-related issue.”

“Many of the companies that have our software have stopped card transactions. We are being asked by them to stop this arrangement for the time-being,” said Xobayer Shihab, who works for a software company that sets up payment services in restaurants and shops. 

A customer who had recently visited a restaurant in Dhanmondi said the staff refused to accept card or bKash payment. 

“I had to wait at the restaurant while my friend went downstairs and cashed out from a bKash agent,” he said, adding there were no notices posted on the entrance about accepting cash only.

Cash payments can help avoid VAT and bank charges

Many restaurants are also not following government instructions which mandate that VAT for products be included in the product prices, not charged at check-out.

National Board of Revenue (NBR) officials say VAT evasion could be the reason behind this.

Restaurant owners, however, blame NBR for harassment.



A restaurant owner, seeking anonymity, said: “Our business has suffered a lot during Covid-19. Then when the situation returned to normal, the NBR started putting a lot of pressure on us with VAT and taxes. And among them are some dishonest NBR officials who are harassing us to skim off the top. 

Moinul Khan, director general of the VAT Audit, Intelligence and Investigation Directorate at NBR, said if written or verbal allegations are found against someone, the NBR will take strict action against them and verify those claims. 

“And if found guilty, there will be severe punishment for these officials.”

Asking about the cash-only system, the restaurant owner told Dhaka Tribune: "Simply put, there is no chance of evading VAT or tax on any transactions made through the banking channel. That is why many restaurants have stopped card transactions recently.” 

Moreover, in case of card transactions, the banks take extra charge as well, which goes out of the owners' pockets, he added. 

“Why should I pay 2-3% more during this business recession? Moreover, many of the customers who come to eat after Covid-19 do not want to pay VAT and request to make cash payments without bills,” he further said.

Moinul Khan said that in general, when VAT intelligence does a search, they mainly check digital transactions. 


Also Read - Businesses not willing to buy VAT machines at NBR’s price


“Now if they choose this new approach, we also need to change the system. We would like to ask these organizations why they are doing this. And if there is any issue of VAT evasion or negligence in paying taxes, then appropriate action will be taken,” he added.

Effect on revenue

After the first month of the current 2021-22 fiscal year, August ended with a revenue shortfall of Tk5,210 crore.

Data analysis shows that the NBR collected Tk19,194.65 crore of revenue in August, which was Tk15,354 crore in July — Tk5,613 crore short of the monthly revenue target. 

Moinul Khan said that the new administration has taken a very strict stance on the collection of VAT. 

“As a result, revenue is also increasing. Moreover, we have noticed that there is a growing tendency among ordinary people and businessmen to pay VAT responsibly,” the NBR official added.

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