An announcement from the National Board of Revenue regarding the filing of value-added tax returns have thrown businesses into trouble. The sudden move announced on April 10, came as a surprise to many businesses who have kept their offices and activities shut since the government declared general holidays and enforced stay at home order from March 26 to slow the spread of coronavirus that has claimed so far infected 803 and 39 lives in Bangladesh. “It appeared to us that we live in a different world,” said a top executive of a multinational company sharing his ordeal in preparing the returns for VAT, which is the highest sources of revenue for the state. The company, which has been operating here for many years, had to call back its accounting and related employees to the office at a time when movement is restricted. “We had to take the risk of going out only to prepare the returns and deposit VAT to the coffer,” he said. And in the face of rising concerns and difficulties faced by businesses, Finance Minister AHM Mustafa Kamal yesterday said the deadline for returns submission would be extended. “I have told the NBR chairman to extend the deadline,” he told The Daily Star yesterday over the phone. He, however, did not say by how long would the deadline be extended. There is no provision in the VAT and Supplementary Duty Act 2012 to extend the deadline for returns submission. The NBR has now written to the president to give it the authority to extend the deadline. Before the revenue board announced the decision that it would keep its VAT field offices open from April 12 to April 15 to receive VAT returns, businesses had expectations that the authority would relax rules regarding the fine of Tk 10,000 for delayed filling and waive 2 per cent interest for delayed submission under the circumstances. As per rule, businesses have to submit details of transactions of the previous month and deposit VAT paid by the end consumers to the state coffer within 15 days of the following month. Firms have to pay Tk 10,000 as a penalty for failure to submit VAT returns within the scheduled time. They can also seek time for delayed furnishing of return but they have to pay 2 percent simple interest monthly for delayed submission, according to rules. On the one hand, penalty and interest burden for delayed submission increase cost of businesses during these days of shutdown. On the other hand, there was no way for them to apply to the field office of VAT seeking additional time as they were also closed as per the government directive. “How do we apply for time extension when VAT offices were also closed?” he said. Underscoring the problem, the Federation of Bangladesh Chambers of Commerce and Industry urged the revenue board on April 9 for extension of the deadline from April 15 without penalty. The country’s apex trade body said it would not be possible for many businesses to furnish VAT returns on time because of coronavirus crisis. “This is an abnormal situation and abnormal situation calls for abnormal measures,” said Masud Khan, adviser of Crown Cement and chairman of Glaxosmith Kline Bangladesh. The NBR officials said the authority decided to keep its field offices open on a limited scale only to receive VAT returns so that the businesses that want to submit return can. Another reason is to help firms avoid the penalty for failure to submit a return within the deadline. The revenue authority also argues that many offices include banks, pharmaceutical companies, supermarkets, food business operators, ports and export-import related activities have been closed since March 26. “We know that all will not be able to comply. So, we are trying to ensure the returns of those who will be able to comply. We are expecting VAT returns from those who are maintaining their operation. We are contacting firms,” said a senior official of Dhaka North VAT Commissionerate.The government also needs money, the official said. Yet responses so far have been lukewarm, said officials at the field. Revenue officials said a section of firms would be able to submit returns online. It is those who are doing the jobs manually or yet to automate businesses fully are facing problems. For instance, Green Delta Insurance Company (GDIC) could not submit returns as its branches and headquarters have been bolted shut during the countrywide general holidays. “We have informed the field office that we would not be able to file returns due to the lockdown,” said Chinmoy Chakrabarty, executive vice-president of GDIC. The insurance company did not get all transaction information from field offices as courier services are also closed. As there is no provision in the present VAT law to relax rules related to waiver of penalty, the NBR is working to send a proposal to the president to issue an ordinance under the circumstances.
