The National Board of Revenue (NBR) has begun developing a technology-based app to collect advance tax at the retail level. The provision for deducting advance tax at Tk 2 per thousand during product supply was already included in the budget, and the revenue authority is now moving to implement it.
The NBR's information technology wing has started working on building the app. The authority expects to finalize the app's usage by January next year. Initially, distributors of large manufacturing companies will be integrated into the tax collection process through this app.
7 million retailers to come under tax net
There are approximately 7 million retailers in the country. Once the new tax collection mechanism is implemented, all of them will come under the tax net, according to the NBR. However, a section of retail traders has expressed concerns over the initiative. They fear it will create additional pressure on small retailers, potentially leading to a rise in product prices.How the app will work
Large manufacturing companies have distributors across the country. The NBR plans to initially collect the advance tax through these distributors using the app. The tax will be deducted at the time of product supply and subsequently deposited into the government exchequer.Analysts suggest that while this new method could help increase tax revenue, its smooth implementation and minimizing the impact on small businesses may pose significant challenges. The NBR, however, has expressed hope that the app will make the process simpler and more transparent.
