VAT registration up by 69% in one year even amid Covid-19

In the last year, 1,15,031 business entities in the country have come under VAT (Value Added Tax) despite the slowdown in the economy due to the outbreak of the Covid-19 epidemic, which is 69% more than that in the previous year.

Despite good growth in VAT registration in one year, the government and economists feel that the existing scope of VAT is not yet in line with the size of the country's economy, relevant sources at the National Board of Revenue (NBR) said.

At present, there are 2,82,200 companies with VAT registration in the country.

At present, a business with an annual turnover of up to Tk50 lakh does not require VAT registration. Companies having a turnover of over Tk50 lakh to Tk3 crore have to pay a 4% tax on the total sales.

The tax rate for a company having a turnover of more than Tk4 crore is 15% with some exceptions.

The government fully implemented the online VAT registration system in 2019. Even though registration is done online, many people are still submitting VAT returns manually every month.

According to the NBR, 11 VAT commissioners across the country are overseeing field VAT management across the country. Most of these VAT registered businesses are under the Dhaka South VAT Commissionerate Office where there are more than 72,000 registered businesses.

Sources said over 38,000 businesses under the office have been newly registered in the last year, which is 112% higher than the previous year.

Besides, VAT registration has been done at a higher rate through Khulna and Dhaka North VAT Commissionerate offices.

A senior NBR official said many companies, whose sales are eligible for VAT registration but are not registered, have been brought under compulsory registration through a survey.

After paying VAT registration, a company has to submit a VAT return every month, otherwise, a fine of Tk10,000 will be applicable.