Revenue Mobilization Program for Results: VAT Improvement Program (VIP)

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The development objective of the Revenue Mobilization Program for Results : Value Added Tax (VAT) Improvement Program Project for Bangladesh is to improve revenue mobilization and transparency in the VAT administration. The project has four components. The first component, operational modernization of the VAT wing of national board of revenue (NBR) aims to enable the NBR to ensure a high level of voluntary compliance with the VAT system. This component will cover core VAT functional areas: (i) registration, return processing, tax payments, taxpayer accounting, and tax refunds; (ii) tax audit; (iii) collection and enforcement; (iv) tax appeal; and (v) taxpayer services. The second component, introduction of an integrated VAT management system will provide for procurement and implementation of the integrated VAT management system based on commercial off the shelf software (COTS) and associated consulting services to support modernized tax administration operations in the NBR. It comprises of following six sub-components: (i) integrated VAT management system; (ii) establishing a data center; (iii) establishing a centralized processing center; (iv) establishing a contact center; (v) establish a data network to enable VAT staff to have access to the information technology (IT) tax administration system through the computer terminal; and (vi) desktop hardware and software and local and data center servers. The third component, institutional strengthening and capacity building consists of VAT wing reorganization along function lines and staff training to enable staff to utilize the new integrated VAT system and business processes. The fourth component, program management consists of two parts. Part one addresses the challenge of properly managing the implementation of the program and supports expert advice on program management, IT, procurement, financial management, and disbursement. Part two supports a change management and a comprehensive taxpayer communication and education program to build internal and external support for the reform.