Recently, the National Board of Revenue has issued a circular dated June 18, 2020 to the managing directors and CEOs of all commercial banks in Bangladesh asking them to verify the annual sales/turnover, annual report, auditor’s report and check back with the returns of the tax-paying company for any inconsistencies, and then report accordingly to the VAT authorities
The country is facing the worst ever challenge in its history. Covid-19 has impacted all spheres of our lives and never before has mankind had to make so many sacrifices and change the way they work, live, eat, worship, interact and behave. Work is hampered due to white collar workers' not being able to attend offices, while the blue collar workers, who have to toil on a daily basis for their food and sustenance, are the worst hit, with the poverty line now plummeting to around 40 percent from 20 percent before. Educational institutions are closed and travel has become very limited.
In the face of the pandemic, doctors, nurses, ward boys, technical personnel in the medical domain and other hospital staff are at the very forefront of the "war" we are waging on Covid-19. We are also aware of the hard work being done by the members of our armed forces and the Police, RAB and Ansar forces in ensuring social distancing, lockdowns, distributing food and delivering of medicines and even carrying out burials. Many have perished to the disease from amongst the frontline workers mentioned above, which is extremely sad for their respective families and the nation.
Another unsung group of frontline workers, about whom hardly anyone talks about or gives only scant recognition or credit to, are our bankers. No bank has shut its doors in the face of even the strictest lockdown. Some branches have always been open to meet the banking needs of our citizens. And, now that the lockdown, except for the red zones has been lifted, and the economy is trying to spring back from the involuntary tailspin it was consigned to, banks are back to working at full gear with all branches now made open to the public. We have recently heard of a great rush of customers in the branches of banks with hardly anyone adhering to social distancing norms, thus putting all at risk of contracting and further spreading the dreaded disease.
In this connection, it may be highlighted here that it is the banks which remain open even before the day of the two Eids to meet the needs of customers, especially in industrial zones. While other businesses have longer holidays during the Eids, bankers have to return to work immediately after the festivals.
The Honorable Prime Minister has announced a series of stimulus packages to support and revive the businesses of the country, which is most admirable, and an example in South Asia. She desires a very quick implementation of these measures, and, it is the bankers who are responsible for receiving applications from their customers, ensuring they are complete in all respects, then obtaining necessary approvals and finally disburse the amounts to the companies.
Recently, the National Board of Revenue has issued a circular dated June 18, 2020 to the managing directors and CEOs of all commercial banks in Bangladesh asking them to verify the annual sales/turnover, annual report, auditor's report and check back with the returns of the tax-paying company for any inconsistencies, and then report accordingly to the VAT authorities.
If later on, any difference is found between the annual report and accounts and the returns submitted to the VAT authorities, the responsibility for this will fall on the concerned bank officer.
Now, this circular gives rise to a number of questions.
- It is NBR's responsibility to check VAT returns and they have VAT Audit and Intelligence Cell and the VAT Enforcement & IT cell at their disposal for this work.
- By asking the banks to do their jobs, they are passing their responsibility to them.
- This will increase a bank's work, meaning more people will be required.
- Thus, more expenses, when the banks are struggling to reduce costs as much as they possibly can.
- Already banks have suspended bonus, increments and promotions. Other cost cutting measures have been put in force including no new hires, which is detrimental to employment of our graduating students. Also banks have cancelled holding any events at physical locations and are only holding important ones via digital media. All purchases of fixed assets except for IT and digital banking have been suspended. All expansion and diversification activity is also on hold.
- Some banks have already cut salaries, which is demotivating bankers and furthermore causing social problems.
- Bankers, as mentioned at the outset, are also in the frontline of the Covid-19 pandemic. A good number of bankers have died and many are sick.
- After all, banks are the ones who are implementing the stimulus package and the bankers need to be kept motivated.
In the face of all these hurdles, to add more work to bankers, for which they are not trained, is not part of their job descriptions and Standard Operating Procedures (SOPs) is unexpected and burdensome. We appeal to the National Board of Revenue to withdraw this circular and spare bankers this additional work and responsibility, thus freeing them up for serving the banking needs of their customers, especially in delivering the stimulus packages in the face of the ongoing pandemic.
The author is a former chairman of the Association of Bankers Bangladesh (ABB) and former Managing Director & CEO of Mutual Trust Bank, and currently an adjunct faculty at the School of Business at Independent University Bangladesh (IUB). He also serves as the Vice President of MCCI Dhaka.