NBR orders to freeze BPC bank accounts

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Doulot Akter Mala
The revenue board has asked half a dozen banks to freeze the banking transaction of Bangladesh Petroleum Corporation (BPC) as it has reinforced drive to recover outstanding taxes from the struggling state firm.
The tax office of the National Board of Revenue (NBR) has ordered Sonali, Janata, Agrani, Prime and Standard Chartered banks to collect Tk 1.44 billion in arrear income taxes from the corporation's accounts.
Under the rule, the tax authority can direct banks to seize the accounts of individuals or companies that fail to pay taxes in time.
"We've asked more than six banks to suspend the BPC's transaction and deduct the amount from its accounts accordingly," a senior tax official said.
He added the suspension order will remain valid unless the BPC pays the arrears off.
The official also said the banks would have to pay the entire amount if it fails to comply with the NBR directive under which notices were served recently at different branches of the banks.
Faced with the odds, the troubled BPC has sought immediate intervention from the Power and Energy Ministry in a desperate attempt to escape the possible punitive action.
"We've incurred Tk 15 billion in losses this year. We're still bleeding as the government hasn't made price adjustment in the local market," said BPC chairman Anwarul Karim.
Oil prices average $75 a barrel in the international market, but Bangladesh is still selling petroleum products much below the imported price, leaving the state petroleum marketing company to lose.
Burdened with Tk 16.89 billon in loss, the BPC is already on the financial life-support, receiving as much as Tk 9.0 billion in loan from the Finance Ministry, which needs to be repaid at 3.0 per cent interest.
Of the amount, the BPC has provided Tk 4.0 billion in customs and value added tax (VAT).
BPC chief said opening letters of credit for oil import and payment of Islamic Development Bank (IDB) loans have become uncertain in the wake of the NBR notice.
"Fuel import and supply may face disruption unless notices not withdrawn immediately," he said.
"We're financially frail. It's not possible for us to pay off the entire amount at a stretch. But the corporation is willing to repay," BPC chairman said, pledging to settle the issue in consultation with the NBR.
He warned that the tax offices would be "responsible for any potential supply crunch of oil" owing to the suspension of transaction in bank accounts.