NBR to refund Tk 100m in paid tax to GB

The revenue board has finally decided to allow Grameen Bank (GB) to avail a refund of Tk 100 million paid as tax as the Nobel-winning microfinance institution would go on enjoying tax-exemption facility with retrospective effect on its income.

After a tug-of-war over the matter, the government's revenue authority will allow the GB to enjoy the tax benefit for a period of six months with retrospective effect from January 2011 to June 2011.

The National Board of Revenue (NBR) took the decision in a recent board meeting with the consent of all top officials of the income-tax wing, said a senior tax official.

While the micro-credit bank had been mired in legal battles over its management change, this issue also remained pending during the last two years despite several requests from the GB for resolving the matter.

The bank has faced with problems in completing its financial statements for the calendar year 2011 for that impugned period as it always enjoyed tax waiver on its income, save that particular period.

The GB, which brought Nobel Peace Prize for itself and its founder, Prof Muhammad Yunus, has been enjoying no-tax facility on its income since its inception. The government had extended the tax holiday in phases.

The tax authority's delay over extension of time of tax-exemption forced the GB to pay corporate tax for January- July period of 2011.  Until July 2012, the government could not take any firm decision on extension of the tax-break after its expiry on December 2010.

Later, the government offered tax exemption for GB in July 2012, with retrospective effect from July 2011 to December 2015.

Amid that uncertainty, the six-month timeframe, from January 2011 to June 2011, had been left out of the exemption facility.

The board had ruled out GB's plea twice to waive tax for that period after the authority found it difficult to adjust later on.

One official said, "The NBR reconsidered the issue following instruction of the government high-ups as the GB always had enjoyed the exemption since 1983, the year of its inception."

The bank had to pay Tk 100 million as advance income tax in the fiscal year 2011-2012 amid uncertainty about getting exemption because of delays in taking decision by the government.

The NBR official said the paid taxes would be adjusted with the payable tax of the institution after December 2015, if the revenue board does not extend the exemption period further.

"The tax authority can also refund the amount with a voucher if higher authorities permit so," he said.