According to NBR's primary estimate, Tk 800 crore can be realised as VAT from the wholesale and retail traders. Whereas, in the last fiscal, the VAT collected from this sector amounted to only one-tenth of this estimate, or Tk 80 crore.

The radical and manifold changes the current budget has brought to VAT laws and regulations have drawn sharp criticisms from the business community, with shopowners protesting for weeks culminating in today's strike.

"The strike will be of no use. The VAT will have to be paid in accordance with the legal provisions put forward in the budget," an NBR high official said, adding, however, due to the severe flood crisis the VAT collection deadline has been pushed back to August 31 from July 31.

The official said if VAT is not paid even by the new deadline, appropriate legal actions would follow against the defaulters.

To begin with, in next month's drive, taxmen will collect the minimum amount of VAT from the wholesale or retail traders with a view to establish a 'VAT paying culture' first, sources said. VAT collection at the optimal level in this sector will be enforced gradually within a couple of years, they added.

According to the current budget, the minimum amount of VAT to be paid by a business enterprise in the capital is Tk 4,200, in other city corporation areas Tk 3,600, in district headquarters Tk 2,400 and at upazila level Tk 1,200.

NBR sources said only a paltry number of shops out of the total 200,000 in Dhaka City pay VAT. At the end of the last fiscal, the NBR sent letters to 50,000 shops in the city notifying them about their due VAT payments and asking them to make VAT registration.

An official of the VAT department of the NBR yesterday told The Daily Star more than 500 shops in the Old Dhaka were recently fined Tk 20,000 to Tk 30,000 for not making the VAT registration as well as defaulting on VAT payments for the last fiscal.

He said a process is currently underway to register the remaining 150,000 shops in the capital and district officials across the country will start the same process next month to bring businesses in their respective districts under the VAT regime.

A monitoring cell to supervise strict enforcement of the drive will also be set up under the aegis of the finance ministry headed by State Minister for Finance Shah M Abul Hussain. "The state minister will personally monitor the day to day operations of the drive," the NBR high official said.