Two-thirds of the private universities are yet to pay an estimated Tk 4.0 billion in tax arrears despite a freeze on their bank accounts for the past two months.
The authorities concerned under Taxes Zone-11 froze bank accounts of 33 private universities last March.
The accounts of 22 universities now remain frozen due to non-payment of dues even after the taxman's notices for clearance before 15 March 2024.
Of the institutions, 11 have paid taxes partially or fully to get their accounts unfrozen.
After a February 27 court verdict, taxmen made a move to realise outstanding taxes retrospectively.
However, three universities again lodged a leave-to-appeal plea with the Appellate Division of the Supreme Court, which was also ruled out last Thursday.
Against this backdrop, many raise questions how these universities are running regular activities and paying salaries with their accounts frozen for nearly two months.
Allegations have it that some private universities are maintaining multiple bank accounts with intent to dodge the taxman, an accusation that insiders in private universities have ruled out.
As per the Private Universities Act 2010, any such privately-run university will have to carry out all financial activities from a single bank account.
When approached, National Board of Revenue chairman Abu Hena Md Rahmatul Muneem told the FE that the board would look into this issue.
The insiders rather highlighted their distressed financial status to pay regular salaries and Eid bonus to teachers and other staff members.
Some said they were compelled to do cash transactions with an eye to receiving tuition fees and other charges to carry out regular activities.
According to University Grants Commission (UGC) member Prof Biswajit Chanda, private universities cannot maintain more than one financial account legally.
The UGC supervises academic and governance parts of private universities, while the taxman is empowered to find out any concealment of tax issues, he says.
Sheikh Kabir Hossain, president of the Association of Private Universities of Bangladesh (APUB), said private universities were not following common rules under one platform to maintain compliances.
"They take their own decision and many of them ignore the compliances," he alleged.
Although private universities are running under antitrust law, some irregularities have been found in their operations, according to Mr Hossain.
He, however, said some varsities were in dire financial straits and unable to pay the taxes demanded by the NBR on a retroactive basis.
"We'll comply with the court order and proceed to pay taxes," said ULAB vice-chancellor Prof Imran Rahman.
He, however, found the taxman's stern action to freeze bank accounts "insensible" and suggested a flexible approach for such educational institutions.
According to the VC, taxing education is a hindrance to delivering knowledge and doing research activity and it may lead to a hike in tuition fees.
Such harsher action has jeopardised the operations of some universities, thereby compelling many to refrain from paying Eid bonus to teachers, he added.
Dr Fahmida Khatun, executive director of the Centre for Policy Dialogue, also opposes the existing tax provision on educational institutions fearing a burden of higher tuition fees on students.
Public universities are unable to accommodate huge students, forcing many middle- and low-income people to enrol in private universities, she says.
UNIVERSITIES WITH FROZEN ACCOUNTS
North South University with Tk 1.8 billion undisputed tax demand, South East University with Tk 450 million, United International University Tk 170 million, The University of Asia Pacific Tk 286 million, University of Development Alternative Tk 93 million, The Peoples University of Bangladesh Tk 52 million, Prime University Tk 47 million, University of Information Technology Tk 11 million, Victoria University Tk 1.4 million, Sonargaon University Tk 3.5 million, University of South Asia Tk 59,763, American International University, Bangladesh Tk 801 million, Manarat International University Tk 29 million, America Bangladesh University Tk 2.4 million, Bangladesh Islami University Tk 0.5 million, Bangladesh University Tk 0.5 million and Dhaka International University Tk 0.2 million.
Prof Dr Farid A Sobhani, president of the Bangladesh Society for Private University Academics (BSPUA), said some of the associated companies were injecting funds to help run regular activities.
The universities have some separate accounts from provident funds and loan accounts, which have been supporting them now, according to him.
"Universities are framed under trust act in a non-profit manner. Imposition of taxes seems like double standard in that case," said Prof Sobhani.
According to section 44 (7) of the Act, money of the general fund of a university cannot be spent on any purpose other than essential expenditure.
Earlier, private university leaders in a letter said they could not receive any money from the general fund of non-profit private universities recognised by law.
Paying income tax or spending it in other ways was also a direct violation of the Act, they cited.
The NBR issued a gazette notification on 28 June 2007, imposing a 15-per cent income tax on private universities that took effect from July 01.
That was the beginning of a legal fight between the NBR and private universities that dragged on for 17 long years on behalf of their respective sides.
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