NBR's VAT audit intelligence detects 37 firms as tax dodgers

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FE Report
The VAT audit intelligence and investigation department under the National Board of Revenue (NBR) has identified 37 top taxpaying companies which allegedly evaded Value Added Tax (VAT) worth Tk 1.12 billion between 2008-2011.
Among the companies, two foreign banks, eight local banks and one insurance company have dodged tax payments worth Tk 400 million during the period.
Beverage, food, ceramic, chemicals, particle board and pharmaceutical companies are the others that have evaded the remaining amount in tax.
The VAT audit intelligence and investigation department carried out the audit as part of its regular review on random basis and identified the evasion.
Following the detection and notices issued by the department concerned, 17 companies have deposited Tk 160 million with the government exchequer in the last couple of months.
The companies have stated that they 'mistakenly' did not pay the tax amount which should not be counted as evasion, but the VAT audit intelligence and investigation department said that the companies had evaded the amount intentionally.
The department also imposed a substantial amount of penalty on the companies for their failure to pay the VAT timely.
Seven companies submitted written explanations to the Large Taxpayers Unit (LTU) on the unearthing of the VAT evasion instead of paying the money. But the VAT audit and intelligence department did not
come up with replies to such explanations.
Seven other companies filed writ petitions against the NBR's claims.
When asked, a high official at the VAT wing told the FE that the audit intelligence and investigation department was operating with a limited manpower, for which it could not bring into its focus the whole scenario of the tax-related irregularities, VAT evasion in particular.
If the intelligence department's strength and capacity were increased, the revenue amount from VAT could be raised manifold, he added.
LTU collects tax from 160 organisations, both public and private. The department was set up in 2001 as part of the suggestions by International Monetary Fund (IMF) to streamline the country's revenue administration.
Tobacco, telecom and gas companies are usually top VAT payers in the country, but officials said the telecom companies have quickly established their premier place among the top ten due to the rapid growth in mobile phone uses.
British American Tobacco (BAT), GrameenPhone, Dhaka Tobacco, Titas, BanglaLink and AKTel are the leading VAT paying entities, while private banks are also the major VAT paying companies.
Tax collection from the country's big enterprises grew over 22 per cent during the first eight months of the fiscal, showing a gradual return of business confidence and an upturn in consumer spending.
Companies and top state-run enterprises, the taxes of which are collected by the Large Taxpayers Unit (LTU) of the revenue board, have paid Tk 63.48 billion in value added tax (VAT) until February 2012.
The government has set a target of Tk 101.44 billion (10144 crore) in VAT for the LTU wing in the current fiscal.