Companies’ accounting software: NBR move seeking user ID, password irks businesses

A move by the National Board of Revenue asking for sharing the user identification and password of companies' accounting software has created concerns among businesses, which said such a measure would give negative signals about the business climate in Bangladesh and discourage investors. 

Earlier this month, the Large Taxpayers' Unit (LTU) of Value Added Tax (VAT) directed 110 large companies to share read-only user ID and passwords of their accounting software citing that this would bring about transparency in revenue payments and save cost and time.

The unit, which collected nearly half of the total Tk 108,400 crore VAT collected in the last fiscal year, argues that it is necessary to oversee companies' VAT-related activities and audit the VAT issues of the firms through automated means, with a view to ensuring a high standard of tax compliance and accountability.

The field office of the NBR cited the scope of self-clearance of internationally traded goods by compliant companies under an arrangement called authorised economic operator.

And automated supervision and auditing of firms are necessary to ensure similar compliance under its jurisdiction, said the LTU, asking companies to submit the read-only user IDs and passwords within seven working days.

The deadline ended earlier this week.

The Metropolitan Chamber of Commerce and Industry (MCCI) has already requested the NBR's field office to reconsider the directive as they are 'highly confidential information' and there is a risk of leakage, which would affect businesses.

"This is not a business-friendly approach. How will they ensure that this confidential information will not be misused?" asked Saiful Islam, president of the MCCI.

According to the business leader, most of the companies under the field office of VAT are listed with the stock exchanges and they disclose business-related information for their shareholders.

"They are in the public domain. If we share the information [user ID and passwords of accounting software], there will be a risk of leakage of the information. How could we then answer to our shareholders?"

The NBR can audit firms as per laws and seek particular VAT-related information from any company if it has any doubt.

"But it should not ask for the passwords indiscriminately. Such mistrust is failing to make the tax system business-friendly. We all have to play a responsible role. Mistrust does not bring any good," said Islam.

Bangladesh is yet to attract the expected level of foreign investment and multinational companies might see the move is an abuse of power, said Islam.

In a letter to the LTU on August 11, the MCCI said the directive might send out negative messages and Bangladesh's position in the case of ease of doing business would deteriorate.

"International agencies and foreign investors who closely watch trade and commerce in the country may read the move as an immature decision. This may affect foreign investment," it said, requesting the NBR to consider an alternative.

The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) plans to share its reservation about the issue.

"Why do they need this?" questioned FBCCI President Md Jashim Uddin.

"Companies registered with the LTU deposit a good amount of revenue. Why are you trying to milk them?"

Jashim said officials are focusing only on the existing taxpayers to collect revenue and are not going after those who are not paying taxes.

The Foreign Investors' Chamber of Commerce & Industry (FICCI) has reached out to all of its members which have received the letter to hear their views about the NBR move.

"The members expressed their concerns from the perspectives of data confidentiality and protection as well as information and cyber security risk," said Naser Ezaz Bijoy, president of the FICCI.

"Therefore, the FICCI will write to the LTU, requesting for a meeting to explore an effective solution to the NBR's requirement without exposing the large taxpayers to unmitigated risks."

Contacted, Wahida Rahman Chowdhury, commissioner of the LTU VAT, said the LTU only wants view-only access to the modules where companies maintain VAT, tax and customs-related information in order to match their data with the returns submitted every month.

"We want the view-only access to purchase, sales and balance data of the VAT-payers. We want information related to revenue. There is nothing to worry about. Information will not be leaked. Confidentiality will be maintained," she said.

According to the commissioner, the NBR seizes documents and computers during inspections.

"We don't want to do that. We want to check data electronically," she added.