Limited corporates turn cash cow for VAT as 110 large companies paid around half the aggregate value-added tax (VAT) collected by the revenue board last fiscal, out of over 0.3 million registered firms.
The business biggies deposited the consumption tax worth Tk 524.33 billion out of Tk 1.08-trillion total VAT receipt by the National Board of Revenue (NBR) in the fiscal year (FY), according to Large Taxpayers Unit (LTU) VAT data.
Economists say the potential of VAT revenue has to be explored "immediately to cover the growing budget shortfall of the government".
A major part of this tax worth Tk 278.30 billion came from cigarette- manufacturing companies-notwithstanding perceived leakages.
The amount is 53.07 per cent of the total revenue collected by the LTU.
British American Tobacco Bangladesh Co. Ltd (BATB) Ltd alone paid Tk 247.26 billion in VAT. A new unit of BATB, located in Savar, also paid another 11.70 billion.
United Dhaka Tobacco Co Ltd paid Tk 19.33 billion.
However, VAT payment by both the tobacco companies declined 0.74 per cent for BATB and by 3.77 per cent for UDTC last year.
A senior VAT official says, "Some local companies are selling and marketing tobacco items openly without having valid licences."
Outreach of such companies outside the metropolitan cities resulted in decline in sales of cigarettes in formal channel, he adds.
According to LTU data, BATB's VAT payments showed a sharp increase during the last five years.
In FY2017-18, the company paid Tk 165.39 billion in VAT followed by Tk 196.96 billion in 2018-19, Tk 207.66 billion in 2019-20, Tk 249.11 billion in 2020-21.
The VAT payment by UDTC in the last five years was not consistent as the company paid Tk 37.07 billion in 2017-18, Tk 58.48 billion in 20018-19, Tk 27.31 billion in 2019-20 and Tk 20.09 billion in 2020-21.
Telecoms sector is the second-largest contributor of the value tax. Four large telecommunications companies paid VAT worth Tk 85.16 billion, up by Tk 510 million from the previous FY's collection.
The largest telecommunications operator, Grameenphone Ltd, paid Tk 44.52 billion in the past fiscal. However, the VAT payment by the company declined 0.73 per cent year on year.
Robi Axiata Ltd paid Tk 23.75 billion, up by Tk 323 million compared to that of previous FY.
Banglalink Digital Communication Ltd's VAT payment also grew 3.09 per cent last year. The company paid Tk 15.46 billion to the public exchequer.
The state-owned Teletalk Bangladesh Ltd also paid 3.55 per cent higher, year on year. The company paid a total of Tk 1.42 billion in VAT last year.
The VAT collection from large 20 pharmaceutical companies increased 11.20 per cent last year. The companies paid VAT worth Tk 34.83 billion last year, up by Tk 3.51 billion over the corresponding period in the previous year.
As economic activities gained momentum after the Covid-19 pandemic, collection of the consumer tax from five posh hotels grew 116.32 per cent last year.
The luxury hotels--Pan Pacific Sonargoan, Intercontinental Dhaka, Radisson Blue Water Garden Dhaka, Dhaka Regency Hotel and Resort Ltd, Unique Hotel & Resorts Ltd--paid VAT worth Tk 944 million last year.
LTU VAT commissioner Wahida Rahman Chowdhury said the LTU paid off to the public exchequer since its inception. "Such units have to be equipped with necessary manpower, logistics and infrastructure to monitor and provide better services to the large and medium taxpayers."
She thinks VAT receipts will increase significantly if the officials can supervise the taxpayers intensively under a separate unit.
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