NBR rejects Ansar-VDP Bank request for tax exemption
Saturday, 7 November 2009
Sheikh Shahariar Zaman
The initiative to improve the living standard of 4.6 million members of Ansar-VDP force hits a snag due to a rigid decision of the NBR.
The National Board of Revenue (NBR) has asked Ansar-VDP Bank, which lends to poor family members of the force, to pay Tk 99 million income tax and Tk 7.1 million in tax on dividend for 2004-07 period.
"The bank requested the NBR to exempt the tax as it does not have the capacity to pay the amount," said a finance ministry official.
The tax authority rejected the request and asked it to pay the tax, he said adding, "The bank is charged at par with other financial institutions of 45 per cent up to 2009 and 10 per cent tax on dividend declared."
Ansar-VDP Bank is a specialised bank aimed at improving the socio-economic conditions of its indigent members. The bank is not allowed to perform general banking and its operation is only limited to disbursing micro-credit to its shareholders or their family members.
The bank only covers 4.47 per cent of the members of the force but if the tax is exempted the amount could be utilised as loanable funds and more members could avail it, the official said.
"The ultimate objective of the bank is to improve the socio-economic condition of a large section of the poor and the NBR can consider the fact and exempt it from paying the tax," he said.
The bank was created under an Act of Parliament in 1995 to generate employment opportunities for the family members of the force and ultimately alleviate poverty through self-employment.
Bangladesh Bank in an opinion said the bank is an exceptional project-based bank and it works for the development of the lower income group members of the force.
"The tax exemption request of the bank can be taken into consideration as the amount can be transferred to the loan fund for the benefit of the members," the central bank opinion said.
The bank commenced its operation in 1996, made profit from 2002-03 and paid dividend from 2004-05.
It has an authorised capital of Tk 1.0 billion and it collected Tk 218 million by selling shares as paid-up capital and the government gave Tk 75 million.
The initiative to improve the living standard of 4.6 million members of Ansar-VDP force hits a snag due to a rigid decision of the NBR.
The National Board of Revenue (NBR) has asked Ansar-VDP Bank, which lends to poor family members of the force, to pay Tk 99 million income tax and Tk 7.1 million in tax on dividend for 2004-07 period.
"The bank requested the NBR to exempt the tax as it does not have the capacity to pay the amount," said a finance ministry official.
The tax authority rejected the request and asked it to pay the tax, he said adding, "The bank is charged at par with other financial institutions of 45 per cent up to 2009 and 10 per cent tax on dividend declared."
Ansar-VDP Bank is a specialised bank aimed at improving the socio-economic conditions of its indigent members. The bank is not allowed to perform general banking and its operation is only limited to disbursing micro-credit to its shareholders or their family members.
The bank only covers 4.47 per cent of the members of the force but if the tax is exempted the amount could be utilised as loanable funds and more members could avail it, the official said.
"The ultimate objective of the bank is to improve the socio-economic condition of a large section of the poor and the NBR can consider the fact and exempt it from paying the tax," he said.
The bank was created under an Act of Parliament in 1995 to generate employment opportunities for the family members of the force and ultimately alleviate poverty through self-employment.
Bangladesh Bank in an opinion said the bank is an exceptional project-based bank and it works for the development of the lower income group members of the force.
"The tax exemption request of the bank can be taken into consideration as the amount can be transferred to the loan fund for the benefit of the members," the central bank opinion said.
The bank commenced its operation in 1996, made profit from 2002-03 and paid dividend from 2004-05.
It has an authorised capital of Tk 1.0 billion and it collected Tk 218 million by selling shares as paid-up capital and the government gave Tk 75 million.