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Around Tk 200 crore or 29 per cent of the total cost allocated to the National Board of Revenue’s VAT Online Project may remain unspent by the end of December 31, 2020, the project deadline, due to lack of progress.
The VOP has so far managed to spend Tk 256 crore or 37 per cent of the total allocated funds worth Tk 690 crore with only three months remaining in hand.
This means that around 63 per cent or Tk 434 crore has still remained unspent as the VOP, launched in May 2014, has failed to complete development of 12 modules to automate the country’s VAT system in more than six years.
The project could so far implement only four online modules — registration of business identification number, VAT returns submission, VAT payment and VATpayers accounts.
Other modules which remain unimplemented include non-filers information, litigation, document management, refund, risk management and debt management.
Officials of the VOP, however, expressed the hope that they would be able to complete development of the remaining modules.
The VOP is expected to launch five more modules in October as implementation of the project has gained momentum in recent months, they said.
They said that the tenure of the project might not be extended further although it would remain half-done by the end of the deadline.
A number of modules may remain unimplemented for lack of capacity of Vietnam-based vendor FPT Information Systems.
Project implementation also slowed down due to major changes made in the VAT and Supplementary Duty Act-2012 compared to the original law under which the VOP was designed and lack of proper monitoring.
The NBR may implement the modules by adopting a fresh project or tagging the modules to another project, they added.
They said that at least Tk 200 crore might remain unspent by the end of the project.
Of the total project cost of Tk 690 crore, the World Bank committed to provide $60 million or around Tk 460 crore under its ‘programme for results’ to automate the VAT system and the rest of the fund is supposed to come from the government exchequer.
Up till April 2020, the multilateral lending agency disbursed $40.78 million in funds based on the progress as fund disbursement depends on results.
The agency may pull out some funds if any component of the project remains unimplemented.
FPT may not get its full payment of Tk 238 crore as it failed to deliver tasks undertaken by it as per contract.
The VOP has so far paid Tk 109 crore to the firm.
Businesses have also been alleging that the returns submission online is not working smoothly and many large businesses have not been able to file their returns online.
Obtaining e-BIN also takes longer due to administrative procedures, they claimed.
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