NBR instructs pvt port users to pay 10pc tax at source

Doulot Akter Mala | Published: January 24, 2014 00:00:00 | Updated: November 30, 2024 06:01:00

The National Board of Revenue (NBR) instructed private port users to pay 10 per cent tax at source with the service charges that would be paid for obtaining export, import and other port-related services.
The board issued letters Thursday in this connection to all stakeholders in a bid to remove the confusion over it in the absence of any clear guideline.
According to the income tax law 1984, Section 52AA, Chapter VII, the taxmen collect 10 per cent tax at source on providers of all types of services, except some specific ones.
NBR first secretary (income tax policy) Md Abdur Rahman Khan said taxmen and some private port operators had been found confused about collection of the tax at source from port users.
It was necessary to clarify the issue as some of the port operators were likening the tax at source to contractors' or suppliers' bills that led to a reduced tax benefit from the NBR, he said.
"It is one of the large sources of income tax. I felt the necessity of making the matter clear to make sure collection of the tax remains smooth," he added.
Private ports, inland container depots (ICD), off-dock terminals and container freight stations will have to collect 10 per cent tax at source on service charges for stuffing, container handling, transportation, documentation and space allocation for container storage.
The private port users include importers, exporters, freight forwarders, shipping agents, banks and insurance companies.
There is a reduced tax rate charged on contractors' and suppliers' bills. But it is not similar to the tax charged on service charges.
Private port operators often sign contracts with exporters and importers on providing port services.
The cut in taxes on contractors' and suppliers' bills would not be applicable to the tax on service charges, he added.
According to the income tax law, taxmen are bound to collect 10 per cent tax at source on all types of service charges, apart from few ones.
There are eight private port operators in the country. They will have to deduct 10 per cent tax at source on service charges from importers, exporters and other businesses and deposit the amount with the public exchequer.Â Â Â Â Â
The NBR sent the letters to all tax offices across the country so that taxmen can collect the tax without any confusion.
The NBR also sent such a letter to the Bangladesh Bank (BB) so that the BB conveys it to all commercial banks, the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) and other stakeholders.