Biman, GMG owe Tk 740m in unpaid travel tax to NBR

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Doulot Akter Mala
Bangladesh Biman and GMG Airlines owe a total of Tk 740 million to the National Board of Revenue (NBR). The money was collected as travel tax from passengers to deposit to the public exchequer, revenue board officials said.
Of the amount, Tk 560 million travel tax is stuck up with the national flag carrier, while Tk 180 million with GMG.
The NBR officials said the travel tax is being collected by the airlines against each passenger. However, hike in fuel prices, global economic downturn, and decline in corporate and leisure travels have weakened the financial condition of the aviation sector, which is the major cause of not paying the tax by the companies.
According to the Travel Tax Act 2003, the airlines should duly deposit travel tax, collected through sales of air tickets in the previous month, to the NBR through its respective zones every month.
However, GMG did not pay any travel tax from March 2010 to October 2011, according to the NBR data.
The NBR officials said they did not even receive data on travel tax collection on a regular basis from the airline companies as per the existing rules.
They said if the state-owned companies remain non-compliant as far as payment of tax is concerned, than it becomes difficult for the taxmen to collect tax from the private sector companies.
As a result, proper collection of travel tax has become one of the major difficulties for the taxmen. The collection of travel tax always marks negative growth, though collection of tax from other sectors surpasses their respective targets every year.
The aviation sector insiders said the significant decline in the number of passengers has pushed the airline operators to a critical situation. A number of private airlines have been forced to suspend their normal operation due to rather insufficient number of passengers amid the global financial turmoil.
Besides, the airlines are sometimes forced to spend the amount, collected as travel tax, for paying salaries of their staffs and for other expenditures.
The NBR has drawn plans several times to change procedure to bring discipline in the travel tax collection. However, those plans remained unimplemented, as the government is preparing a new travel tax act, likely to be implemented from 2012, along with the direct tax act.