The National Board of Revenue will start a countrywide programme this month to make people aware of the benefits of the new VAT law, which will be implemented from July next year.

As part of the initiative, the revenue authority will train businesses in all divisions and districts on the VAT and Supplementary Duty Act 2012, NBR Chairman Md Nojibur Rahman said yesterday.

“We want to create a conducive environment for the effective implementation of the law,” he said at a daylong workshop on the law at the office of the Institution of Diploma Engineers, Bangladesh.

NBR's VAT Online Project organised the workshop for the members of Economic Reporters' Forum.

The tax administrator took the step after the government backtracked on its plan to enforce the new VAT law from the start of the current fiscal year amid resistance from businesses and a section of revenue officials and inadequate preparation by the NBR.

The law, which will replace the VAT Act 1991, will be implemented under an automated platform and envisages a 15 percent flat VAT rate instead of various types of rates now in effect.

The NBR said it wants to train businesses on the basic features of the new law, various aspects of the online VAT system, and at the same time, explain how the new law and automation will benefit entrepreneurs.

Rahman said the NBR would sit with the leaders of the Federation of Bangladesh Chambers of Commerce and Industry to create awareness among businesses so that they take preparation before the VAT system goes online.

The NBR will ask existing firms to re-register online for business identification numbers (BINs).

Currently there are 840,000 BINs in the NBR database and many of those are fake and inactive. Some 30,000 firms submit returns, said officials.

All the old BINs will become invalid after June 30 next year. Without re-registration, they would not be able to submit VAT return, said Md Rezaul Hasan, project director of VAT Online.

He said online registration and re-registration of BINs would be launched after consultation with business leaders so that no confusion arises.

He said the NBR is setting up a data centre and call centre to facilitate the re-registration and registration of BINs.

Syed Mushfequr Rahman, deputy project director of VAT Online, said apart from identifying the noncompliant taxpayers, the law will help bring down the cost of doing business both in the public and private sectors, encourage investment in the private sector and facilitate rapid industrialisation.

Zakir Hossain, deputy project director of VAT Online, said after the implementation of the new law, discretionary power of revenue officials will be reduced.

Jahangir Hossain, member, VAT policy of the NBR, said the new law will not be applicable for three major sectors -- basic foods, primary health care and basic education.

“But it will ensure the inclusion of all economic activities and bring the informal sectors under the VAT system,” he said.

Zakia Sultana, commissioner of NBR, and Nahida Faridy, additional commissioner, also spoke at the workshop.

Framed at the prescription of the International Monetary Fund, the new law is expected to boost the state's revenue collection, curb corruption and tax evasion and improve transparency in the VAT administration. The government with the support from the World Bank is now implementing a Tk 551 crore project to develop an automated VAT system to enforce the new law.