Scrutiny helps boost VAT from large unit

FT ONLINE

The collection of Value Added Tax (VAT) from large businesses increased significantly until March of the current fiscal year (FY).

The increase was attributed to the intensive scrutiny and investigation by the Large Taxpayers Unit (LTU).

However, the performance of a large number of small and medium-scale businesses was unimpressive during the period.

Of the 12 field-level VAT offices, LTU fetched a record 66 per cent of the total VAT collection in July-March period of the current FY, according to the official data.

LTU's VAT collection posted 22 per cent growth, although the combined VAT collection grew by 15 per cent.

The unit collected Tk 312.97 billion VAT out of aggregate collection Tk 577.50 billion in July-March period.

A data of the LTU showed the contribution of the large businesses has been increasing gradually since FY 2014-15.

Of the total VAT collection, the unit's contribution keeps rising.

In FY 2014-15, the unit contributed 48 per cent, which rose to 54 per cent in FY 2015-16 and 56 per cent in FY 2016-17.

The contribution shot up to 66 per cent until March of FY 2017-18.

LTU commissioner Md Matiur Rahman said that the average VAT collection growth of the unit had been 9.09 per cent during the last five years, but this year it was expected to jump to 22 per cent.

He said there is no mismatch between the LTU's and the Controller General of Accounts' data of revenue collection.

The unit compiles its statistics of VAT collection through 100 per cent verification of treasury chalan (invoice), he said.

Explaining the reason for impressive performance of the LTU, he said the unit has detected VAT evasion worth Tk 90 billion during the last two years through investigation.

Of the amount, it has found businesses have obtained unauthorised VAT rebate worth Tk 20 billion.

They have enjoyed rebate from the areas that are exempted from the payment of VAT.

The unit recently received Tk 7.0 billion arrears from Petrobangla, the LTU commissioner said.

"We've examined the annual reports of the large VAT payers and cross-checked the information with their submitted VAT returns," he said.

The unit has found some businesses have deducted source VAT from the consumers but did not deposit it with the public exchequer, he added.

He said some are intentionally doing this while others are not aware of the same.

The unit is also conducting workshops with the banking sector, insurance, cement companies to raise awareness about the proper depository of VAT and its other provisions.

LTU commissioner said it has recently introduced a mobile application to make the unit's activities transparent.

The apps can be downloaded from the Google play store by anyone to keep in touch with the unit, he added.