The National Board of Revenue (NBR) has not been able to collect over Tk 9,962 crore of unpaid revenue due to legal complexities, with more than 4,378 cases currently pending before the Supreme Court’s High Court (HC) Division and Appellate Division. Supreme Court (SC) sources said of the Tk 9,962 crore, the country’s four big companies-- British American Tobacco Bangladesh, Grameenphone, Robi and Banglalink --accounted for over 70 percent by way of outstanding tax and VAT payments to the extent of Tk 7,170 crore, currently caught up in legal complexities.
Meanwhile, National Board of Revenue (NBR) chairman Md Mosharraf Hossain Bhuiyan at a programme in April said authorities might trim revenue collection target by Tk 30,000 crore in the current fiscal year in the face of decline in collection.
The NBR faced a shortfall worth Tk 23,000 crore until March, 2018 for the FY.
Bhuiyan said the revenue collection needs more than 40 per cent growth over the corresponding year's collection to achieve the target.
Legal experts feel the NBR will be able to significantly reduce the revenue gap if the unresolved cases of the four giant companies are taken care of soon.
Attorney General Mahbubey Alam told The Independent that the multinational companies were responsible for the huge amount of unpaid tax. “These multinational companies are depriving us in many ways including not paying tax properly. They are filing cases one after another to avoid paying the unpaid tax,” the state’s chief law officer said.
He also said that the government was trying its best to deal with the issue. “I have already instructed my officers for quick disposal of tax evasion cases so that the revenue collecting authorities can help the government by providing money to reduce the budgetary revenue gap to a great extent,” he added.
He alleged that the NBR at times had loopholes that helped the companies evade taxes. Sources said the NBR and Grameenphone were locked in legal disputes over the payment of around Tk 2,125.54 crore in VAT. Of the sum, Tk 1,484.51 crore was for SIM replacement tax, Tk 45.24 crore for space rent tax, Tk 452.53 crore by way of SIM tax and Tk143.26 crore towards prohibited rebates.
On the other hand, some cases between the NBR and the merged Robi and Airtel —now known as Robi —relating to the payment of around Tk 2,019.96 crore are pending in court. The outstanding sum relates to SIM replacement tax, SIM tax, space rent, taking unlawful rebate and non-payment of interest on dues.
Sources said Robi owed the NBR Tk 1,681.94 crore and Airtel Tk 338.02 crore.
According to the sources, some cases were pending between the NBR and Banglalink over the non-payment of Tk 1,101.65 crore in VAT. Of this sum, Tk 873.65 crore is related to SIM replacement tax, Tk 52.37 crore to space rent tax, Tk 228 crore to SIM tax and Tk 67.25 crore to unlawful rebates.
SC sources said the Appellate Division recently upheld the HC order that asked the Banglalink Digital Communication and Orascom Telecom Bangladesh Limited to pay Tk 403.41 crore and Tk 417.91 crore respectively. None of these companies have paid the money relating to the SIM supplementary duty.
An appeal of the British American Tobacco Bangladesh (BATB), one of the world’s largest tobacco companies, against a HC (HC) order asking the company to pay some Tk 1,924 crore in VAT to the NBR is now pending before the Appellate Division.
BAT Bangladesh stands accused of not paying Tk 1,924 crore in VAT between August 2009 and January 2013. According to LTU-VAT, the company declared medium-grade cigarettes as low-grade ones to avoid payment.
There are four grades of cigarettes, and the revenue board fixes and realises VAT and other supplementary duties on cigarettes based on their grade. In 2015, the NBR and BATB were at loggerheads over the realisation of taxes worth Tk 1,924 crore.
The BATB refused to pay the taxes and filed two writ petitions before the HC, challenging the NBR’s move. Finally, the BATB lost its legal battle after the HC asked it to pay the money to the NBR. After that order, the BATB filed an appeal with the SC against the HC order. The matter is now pending before the Appellate Division for disposal.
The NBR versus BATB case came to limelight in September in 2017 when British newspaper The Guardian accused Alison Blake, the British high commissioner to Bangladesh, of lobbying on behalf of British American Tobacco Bangladesh (BAT) after the company sought her help in a long-running battle with Bangladesh’s revenue authorities.
“The UK foreign office encounters a major lobbying row after a senior diplomat has been seen lobbying in favour of British American Tobacco (BAT) to evade unpaid VAT in Bangladesh,” reported The Guardian.
In an unprecedented move, BATB sought help from the British high commissioner through a letter, although the claim was recognised in the courts.
According to The Guardian, the extraordinary intervention has provoked anger among health organisations and transparency campaigners, both in the UK and in Bangladesh, who say that it breaches strict World Health Organisation rules on lobbying.
Talking to this correspondent, deputy attorney general SM Moniruzzaman, who is looking after the case, said the appeal would come up in the apex court’s cause list this Tuesday for hearing. “We hope the apex court will uphold the HC verdict and the BATB will have to pay the money to the NBR. We are ready to submit our arguments before the court,” he added.
According to sources, the NBR has not been able mop up Tk. 9,962 crore of unpaid taxes due to a total of 4,378 cases pending before the higher court for disposal. Among these cases, 275 disputes involve Tk. 3 crore or above, while the remaining are valued less than Tk 3 crore. NBR legal enforcement member Serajul Islam said almost the entire amount of unpaid taxes due to the legal complexities would be settled if the court disposed of the 275 big cases.
In response to a query, Serajul Islam said they were trying to settle the four mega cases involving British American Tobacco Bangladesh, Grameenphone, Robi and Banglalink within very short time. “We are discussing with the lawyers concerned to take initiatives for quick hearing of the big cases,” he added.
IK