No more tax sop for cos owning fish farms

The government has lifted special tax benefit on income of fish farms after it observed wide-ranging irregularities in getting the facility.

The National Board of Revenue (NBR) imposed Monday tax at a regular rate of 35 per cent on the income of fish farms owned by companies, not individual owners.

Fish farm owners have been paying taxes at 3.0 per cent on their income while other private companies are paying 35 per cent. The facility was scheduled to expire on June 30, 2015.

The NBR issued a Statutory Regulatory Order (SRO), signed by secretary (ex-officio) Aminul Karim, and withdrew the reduced tax-benefit.

From now on, income from fish firms will fall under 35 per cent corporate tax rate in case of company. For fish farms owned by individuals, the owners have to pay 10 per cent to maximum 30 per cent tax on their income from the farms.

Talking to the FE, a senior NBR official said the government high-ups noticed a significant amount of revenue loss through abuse of the tax-benefit for fish farms.

"Many businesses used to shift their profits showing their income from fish farms in a bid to enjoy the reduced tax rate. The taxmen found a large amount of tax evasion through the practice," he said.

Some complexities were also found on monitoring the income and actual payable taxes of the fish farms owners, he added.

"The taxmen have found many of the fish farms disappeared after enjoying the reduced tax rates. They have shown false income from fish farms that they earned from other businesses," he added.

Tax officials assessed income of taxpayers until June 30 of a financial year, for which taxpayers submitted returns in October to December. It takes almost six months time to complete procedures and decide on inspection for monitoring tax compliances of a company.

Asked if the decision would discourage investments in fish farming, the tax official said small fish farmers would not be affected with the new measure as they would enjoy other tax benefits as agriculture farmers.

The NBR imposed the regular tax rates targeting to large businesses and also to put a lid on the corrupt practice, he added.

However, poultry farming, cattle farming, dairy farming, frog farming, horticulture, mushroom farming, floriculture, pelleted poultry and fish feed industry would continue to enjoy the reduced tax benefit until June 30, 2015.