227 large cos not under LTU despite eligibility

Some 227 large companies still remain under the purview of the field-level Value Added Tax (VAT) offices despite having eligibility to come under the functional supervision of Large Taxpayers Unit (LTU).
These companies are paying above Tk 50 million VAT annually to National Board of Revenue (NBR).
As per the LTU selection criteria, framed in 2004, the companies paying above Tk 50 million VAT on an average for three consecutive years will come under LTU-VAT.
An analysis of LTU identified the large companies having the eligibility to come under its supervision. Of the companies, some 33 businesses are paying above Tk 300 million VAT, it pointed out.
LTU gave a list of the eligible VAT paying companies to NBR recently, and sought permission to bring those under its supervision.
It also found some 17.30 per cent of the companies under the unit are paying less than Tk 50 million VAT annually. So, the companies are not supposed to be considered as large taxpayers as per the NBR criteria.
LTU found 27 companies under its purview, out of the 156 active ones, are paying less than Tk 50 million VAT annually.
Officials said the age-old selection criteria should be amended to bring more large companies under LTU and exclude businesses having poor annual turnover.
They said the companies having poor turnover came under LTU's jurisdiction during formation of the unit, before framing the selection criteria. A draft for amendment of the selection criteria has been pending with NBR for the last one year.
Sources said the field-level VAT offices have been opposing the move to amend the selection criteria and to bring all large companies under LTU, fearing decline in VAT collection by their zones concerned.
LTU officials said many of the companies have done balancing, modernisation, rehabilitation and expansion (BMRE) and expanded their business during the last 14 years.
Sister concerns of these large companies should also be brought under one roof for better supervision, they also said.
In a proposal, LTU-VAT urged NBR to allow inclusion of the large companies paying above Tk 300 million VAT under the unit. Talking to the FE, LTU commissioner Md Matiur Rahman said the unit proposed to bring the sister concerns of the large companies under its umbrella by revising the selection criteria.
LTU has already prepared the policy regarding re-fixation of the selection criteria and submitted it to NBR. Volume of trade and amount of revenue of many companies increased since 2004, he added.
Officials said many of the large taxpayers also expressed their willingness to come under one umbrella to simplify their VAT payment process and management system.
The LTU commissioner said a number of companies have expanded their businesses through BMRE, including Beximco, Renata, Drug International, Incepta, Orion Pharma, Square and Olympic etc.
Sister concerns of these companies can be brought under the unit, he opined.LTU contributes almost 56 per cent of the aggregate VAT collection of NBR. It has so far collected Tk 369.72 billion VAT in this fiscal year (FY), 2017-18, posting a 21 per cent growth over the corresponding year.
NBR has set Tk 503.12 billion target for the unit for the FY.
There are some 17 commercial banks, cigarette companies, mobile phone companies, insurance, pharmaceuticals and other large companies under the unit.

[email protected]