Tk 70b revenue unrealised over court battles under LTU

Doulot Akter Mala | Published: December 29, 2013 00:00:00 | Updated: November 30, 2024 06:01:00

Revenue to the tune of Tk 70 billion is remaining unrealised over court battles with large taxpayers under the Value Added Tax (VAT) wing of the revenue board, sources have said.
The Large Taxpayers' Unit (LTU) under the VAT department of the National Board of Revenue (NBR) found the amount remaining unrealised for long worsening its shortfall in revenue collection against the target, sources said.
The unit faced a shortfall of over Tk 30 billion in tax collection against its target in the first five months of the current fiscal year (FY).
Despite relentless efforts the government was yet to realise the amount from the large corporate taxpayers as the cases had been remaining pending for long. The Alternative Dispute Resolution (ADR) process has also not been applied to resolve the disputes.Â Â Â
A senior official at the VAT wing said the stuck-up amount of VAT might have increased, as the recent political unrest worsened the financial health of corporate taxpayers.
Concerned over the pending revenue, the unit recently held a review meeting with its officials to devise ways of realising the taxes.
"We are worried about achievement of the ambitious revenue target of the VAT wing for the current FY. The first half already passed with the financial health of corporate taxpayers deteriorating due to restive politics," the official said.
Although the LTU achieved 17.5 per cent growth in revenue collection in the July-November period over corresponding one, it required to post a growth rate of over 30 per cent for the current fiscal to achieve the target, he added.
The government set the VAT collection target at Tk 510 billion, which is 36.7per cent of the aggregate tax collection target of Tk 1.36 trillion in the current fiscal. Â
The LTU contributes 40 per cent of the total VAT collection target.
In the July-September period last, the LTU collected Tk 52 billion against the target of Tk 60.41 billion.
The shortfall might go up in December as many of the large taxpayers reported that they incurred losses due to the persistent political instability, the official said. Â
Usually, collection of VAT depends on consumption of goods and sales of the businesses.
When it comes to the ADR, the VAT official has said the outside-court settlement of any tax-related dispute largely depends on willingness of the taxpayers.
"The revenue-related cases are now pending with the High Court (HC). Taxpayers have to apply to the HC for shifting the cases to the ADR," he said.
Non-cooperation of some lawyers was also a major reason for the poor response of taxpayers to shift their cases to the ADR, he added.
Of the stuck-up revenue worth Tk 70 billion, about 42 per cent or Tk 30 billion is remaining unrealised from mobile phone operators under different heads.
VAT officials expressed their hope about realisation of the amount as a committee was working on it at the instruction of the HC.
"The committee, comprising representatives of the government and cell phone operators, will submit a report to the HC after reaching consensus over the disputed amount of tax," the official said.
The NBR claimed the aforesaid amount of VAT on SIM card replacement in 2012 from four cell phone companies-Grameenphone, Robi, Airtel and Banglalink. However, the companies differed on the claim.
The mobile phone operators filed a case with the court claiming that they only replaced existing SIMs, not sold new ones while taxmen said their investigation found that new SIM cards were sold in the name of replacement.
There are a total of 168 companies under the LTU including those doing business in the areas of cell phone service, cement, tiles, pharmaceuticals etc contributing a major share of taxes to the public exchequer.