Govt moves to restore monthly VAT return filing requirement

The government has moved to restore monthly value-added tax (VAT) return filing, replacing the three-month filing interval introduced in the fiscal 2026-27 budget, citing difficulties in revenue collection under the revised system.

The Cabinet on Sunday gave final approval to the draft Value Added Tax and Supplementary Duty (Amendment) Act, 2026, at a meeting chaired by Prime Minister Tarique Rahman at the Secretariat, a government statement reads.

“The amendment seeks to revise Section 64 of the Value Added Tax and Supplementary Duty Act, 2012, to reinstate the previous monthly filing requirement after the quarterly system introduced in the current fiscal year's budget created obstacles to revenue collection at the field level,” it reads.

Under the proposed provision, every registered, enlisted or registration-eligible person will have to submit VAT returns within 15 days of the end of each tax period.

If the 15th day falls on a public holiday, returns may be submitted on the next working day.

However, government, semi-government and autonomous bodies, banks, insurance companies, and individuals or entities filing returns will be allowed 20 days after the end of a tax period to submit their returns.

The amendment also empowers the National Board of Revenue (NBR) to extend the filing deadline through an order in the public interest, without imposing interest or penalties.

Information on supplementary duty payments will also have to be included in VAT returns.

The NBR will be able to make electronic filing mandatory for any registered or enlisted entity through an order.

As parliament was not in session, former President Mohammed Shahabuddin promulgated the Value Added Tax and Supplementary Duty (Amendment) Ordinance, 2026, on October 14 under Article 93(1) of the Constitution.

The Cabinet has now approved the draft legislation for conversion of the ordinance into an Act during the ongoing parliamentary session. It will be placed before parliament subject to vetting by the Legislative and Parliamentary Affairs Division.