The revenue collecting authorities have already enlisted 11 companies to create the software, through which the VAT on purchased raw materials can be easily calculated
Imtiaz Ahmed, a regular payer of value added tax (VAT) on purchases of raw materials and sales of products, complains that before using the VAT management software, paying the tax was a mere hassle.
Echoing him, another entrepreneur, Uttam Kumar Paul, managing director of Best Business Bond Ltd (3BL), says: “Previously, VAT used to be paid at three stages — while importing goods, during unloading at port, and lastly, when the product is sold at the wholesale or retail level.”
But this hassle has been fully addressed by the VAT management software, approved by the National Board of Revenue (NBR).
According to the 1991 VAT Act, business organizations had to submit the hard copies of their VAT returns manually.
But now, as per the new VAT Act 2012, they have to submit monthly VAT returns online, which has been facilitated through the new software.
Using the software has been made mandatory by NBR for companies having an annual turnover of Tk5 crore and above. But companies with lower turnovers also have the option to avail the system.
The revenue collecting authorities have already enlisted 11 companies to create the software, through which the VAT on purchased raw materials can be easily calculated.
It will also help company owners to easily determine the correct prices of the finished products after including VAT. The software will also properly calculate VAT during transactions, so that NBR and the companies concerned can oversee the actual VAT on products and services.
The 11 approved companies are Mediasoft, Dhrupadi Techno Consortium Limited, Best Business Bond Ltd, Symphony Softtech Ltd, UY Systems Ltd, Ennova Technologies, Unisoft Systems Limited, CSL Software Resources Limited, Allied Information, Jabosoft Information and Divine IT Limited.
Farhana Rahman, CEO of UY Systems Ltd which is now selling automated VAT management software, hopes that the new system will spare the customers both hassle and money as the previous manual system was time-consuming.
Merits of VAT software
Zahangir Alam Zahid, system engineer of UY Systems, says people were previously in the dark as to how VAT was imposed by companies, or whether customers’ VAT payments were passed on to the authorities by the companies or not.
“But now, the customers will easily be able to see how much tax is imposed on their purchased goods, with no way to tamper or modify the VAT rates. It will help the government to monitor as well,” he explains.
Zahangir goes on to add that their management software has quickly gained prominence among 35 companies, including Square Pharma, Lalbag Chemical and Godrej warehouse.
He says: “Several important tasks can be accomplished easily through the VAT management software and among them, the remarkable ones are purchase account book, VAT invoice, certificate of tax deduction at source, turnover VAT invoice, application of supplementary duty combination, etc.
"VAT management software can easily work simultaneously with SAP, Oracle or any other enterprise resource planning (ERP) software. The VAT management software of UY Systems has been basically developed under the supervision of leading experts who also worked on NBR’s new VAT Act as consultants,” he observes.
But the lack of accessibility, training and marketing about the management software also prevails in the market.
Raisul Kabir, director of Priyo Shop, says: “Generally a company imposes VAT on equipment used to manufacture a product. Later, the buyer of the product has to pay VAT on it as well.”
“In developed countries, as VAT is payable on added value of products, a customer never has to pay it on the overall value of a product at the final stage. But in our country, lack of proper idea about VAT by taxpayers, importers, manufacturers and consumers result in retail customers paying VAT on the overall price of products,” he adds.
Didarul Hasan, director at Bangladesh Association of Software and Information Services (BASIS), says: “The VAT management software is needed now for mobilizing digital payment, as there is no obstacle or harassment involved in paying VAT with the system.”
BASIS President Syed Almas Kabir says: “Although a lack of trust persists within government and private agencies, the creation of VAT management software ensures the government is focusing on prevention of corruption, especially against those who previously manipulated VAT statistics and paid less tax.”
Md Jahangir Alam, second secretary (customs policy) at NBR, told the Dhaka Tribune that the use of VAT management software has been made mandatory to prevent fraud during the VAT collection process.
“Around 50-75% of revenue collected from private organizations in the last five years has come from VAT and income tax. Although there is criticism about expanding VAT coverage, I think now there will be no scope for corruption in the whole process,” he says.