Paying corporate tax failed to impress the tax office


| Update:
January 15, 2022 10:19:02 PM

The tax administration finds that banks and large companies have a tight hand when it comes to payment to the public treasury, since the collection of corporation tax from the latter increased by 7.5% in during the first six months of the current fiscal year.

Officials are outraged by the banks’ below-average tax status, despite making impressive profits for most of them in 2021.

However, corporate taxpayers said they had paid advance tax based on the previous year’s profits in accordance with the Income Tax Ordinance and that the actual collection of taxes would increase over the next six months. coming months of the 2021-22 financial year.

Although overall direct tax collection rose 15%, revenue from the Large Taxpayer Unit (LTU) remained below expectations in the first half of the year, the tax authorities said.

LTU under the Revenue Authority’s income tax wing is behind target by 20 billion taka for the July-December period of the current fiscal year, according to data from the Office National Income Tax (NBR).

It collected 93 billion taka in taxes against its target of 112 billion taka for the first half of the fiscal year.

Tax authorities believe the pace of corporate tax collection needs to be accelerated over the remaining six months, following the impressive performance that is showing in the growth of bank profits.

The tax authorities observe that the collection of corporation tax experiences ups and downs every two years depending on the income of large taxpayers.

Speaking to the EF, Md Iqbal Hossain, LTU Commissioner under the Income Tax wing, said that corporate tax collection will increase in the next half of the financial year as the unit has taken a number of steps to increase collection.

He said the unit has ensured a taxpayer-friendly environment and achieved impressive growth without taking any punitive measures.

“We achieved 15% growth in the past fiscal year without imposing penalties or seizing bank accounts or any criminal action against large taxpayers,” he said.

A number of factors helped the unit achieve higher growth in the previous fiscal year, including collection of arrears, outstanding taxes from previous years, and the money laundering program, which are not available this exercise.

The LTU collected Taka 11 billion in tax arrears in the previous fiscal year compared to Taka 6.0 billion in the previous fiscal year. In addition, a total of Tk 12 billion of residual taxes from the previous year is added to the collection of the last year.

Deputy Managing Director and Chief Financial Officer of BRAC Bank Ltd, Mr Masud Rana, said corporate tax collection from banks could increase by 20-25% by the end of this financial year, following the growth in bank profits in 2021 compared to the previous year.

He suggests proper enforcement of the law to ensure a “corporate tax culture” in Bangladesh.

Mr. Rana, however, likes LTU’s performance relative to that of other tax offices across the country in their dealings with taxpayers.

Addressing the EF, the LTU Commissioner shared some strategies to address challenges in revenue collection this year, including following up on advance tax collection by holding meetings with major banks, stepping up tax collection tax arrears, monitoring the proper filing of withholding tax, pending resolution of court cases that have blocked about Tka 50 billion.

The LTU collected taxes worth 240.11 billion taka in the previous fiscal year, mainly from the banking sector.

Actual LTU collection in FY 2019-20 was 208.38 billion Tk. However, the Unit did not meet its targets for the 2018-19 and 2019-20 fiscal years.

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