Green tax tangled in complexities

Complexities impede enforcing the newly introduced 'Green Tax' and thereby hold back government drive to penalise non-compliant industries which are polluting the environment.
The Department of Environment (DoE) and the National Board of Revenue (NBR) have yet to prepare themselves to list out the polluting industries and enforce the tax, official sources said.
The first quarter of the current fiscal year (FY) has gone by amid such procrastination.
In the budget for FY 2014-15, the government imposed one-percent surcharge on the prices of the goods produced by polluting factories.
The government is losing the non-tax revenue due to the lingering process although the Green Tax was scheduled to come into force from July 1, 2014.
Officials said the preparedness of the government was not sufficient before levying the tax.
The DoE compiled the names of companies and industries that have faced penal action for being non-compliant on environment issues.
The industries include tanneries, washing and dyeing plants of garments, brick fields, auto-rice mills, chemical factories, ship- breaking etc. The DoE selected the industries division-wise.
However, the revenue board could not proceed on a list of some 2,500 industries, sent by DoE, as the department said the list had been prepared hurriedly and needed further review, the officials said.
A senior NBR official said the authorities have found some complexities over imposition of the tax as the law mentioned 'polluting industry' for green tax, not any company or organisation.
"Brickfields, polluting hospitals and diagnostic centres and some other service sectors will be excluded initially from the list of surcharge," he said.
The VAT wing has delayed its move to issue a gazette notification with the names of the companies after it found the major problems.
"Initially, the NBR would start with the polluting industries and later expand the net of green tax to companies with necessary amendments," the official said.
The government is losing revenue from green tax since July 1, 2014. The tax authority would expedite the process, he said.
To enforce the tax, the NBR will have to issue a gazette with the names of the polluting industries after the DoE provides a fresh list.
The NBR official also found problem in the process as it will have to remove names of companies frequently after being compliant.  
The names of the industries would be updated after a certain period of time by excluding those which become complaint and including new non-complaints.
An NBR official, preferring anonymity, said there is also concern over tarnishing image of the export-oriented industries after publishing the list of non-compliant industries.
Many of the exporters, unofficially, requested the government to be cautious over selecting the names of the industries and consider sustainability of their businesses.
Officials said the DoE listed the industries that had faced penal action so far for violating the Environment Conservation Act 1995. The industries have polluted environment by not installing Effluent Treatment Plant (ETP) and other ways.
The green tax will be imposed under the Environment Protection Surcharge Collection Rules 2014 issued by the VAT wing earlier.
According to the law, the VAT wing will collect the 1.0 percent surcharge-non-tax revenue-from the industries after issuance of a gazette notification. The amount of surcharge would be spent on protection of the environment.
The surcharges would be imposed on the revenue board-approved prices of the manufactured products. The tax authority would consider the price-base under which they are collecting VAT.
VAT officials will impose punitive measures and penal taxes in case of non-compliance with the rules by the industries.
Talking to the FE Wednesday, Md. Nojibur Rahman, Secretary of the Ministry of Environment and Forests (MoEF), said the department concerned is reviewing the law to enforce the green tax.
"We have initiated move to impose the tax. NBR and DOE are working on it. The process is taking some time," he said.

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