The National Board of Revenue (NBR) has not been able to collect about 22,000 crore of unpaid revenue of various companies due to legal complexities, with more than 8,745 cases currently pending before courts.
According to the Supreme Court and NBR sources said among these cases, a total of 2,521 cases were pending with the Supreme Court's High Court (HC) Division and Appellate Division, which accounted for over 75 per cent by way of outstanding tax and VAT payments to the extent of Tk 17,329 crore, currently caught up in legal complexities.
At least 2,521 cases relating to the Value Added Tax (VAT) are now pending with the High Court for disposal, 2,521 are awaiting resolution in the High Court. With which the VAT department owes Tk 1,732,981 crore as VAT to various companies.
The Value Added Tax (VAT) department of the National Board of Revenue (NBR) is in dire straits due to the complexity of these cases.
In the current 2022-23 financial year (July-June), 37 per cent of NBR's revenue target is supposed to come from this department. But, there is about Tk 22,000 crore of revenue trapped in the net of cases.
These cases were filed by 12 field offices of the NBR, which were pending before court for a long time.
Though the government tried to dispose of some cases through the Alternative Dispute Resolution (ADR), beyond the court-ordered process, nothing could reduce the complexity of cases, according to the sources.
According to the latest information of the VAT department of NBR, a total of Tk 21,934 crore of revenue has been withheld against 8,745 VAT or Musak related cases.
Out of these money, some Tk 14,563 crore is stuck under the big tax payer unit (musak) of the company, against a total number of 601 pending cases.
Most of the cases filed against the companies of cigarette manufacturers, mobile phones, medicines, banks, gas, electricity distribution, soft drinks, soap, cement and water supply.
Md Sahidul Islam, NBR member (VAT audit), said that though the authority has taken various steps to reduce the backlog of cases. Field offices have been directed to speed up disposal of cases through more effective ADR (Alternative Dispute Resolution) system. It has been possible to reduce cases a little more than before, he added.
Till last October, there was information of about Tk 24,000 crore VAT being withheld in more than 10,000 cases across the country. That number dropped slightly after November.
On January 25, NBR Chairman Abu Hena gave instructions for speedy settlement of the cases in the monthly coordination meeting.
He asked the Customs, Excise and VAT Appellate Tribunal to take action to continue the disposal of the case. Besides, the NBR Chairman also directed the ADR to be stronger and more effective.
Former NBR Chairman Muhammad Abdul Majid said the revenue board should focus on recovering the alleged evaded amount, which had been pending at the NBR's tribunals and in the High Court over the years.
The Revenue Board should focus on resolving the cases relating to alleged VAT evasion by large companies, including state-owned firms, rather than focusing on the cases involving marginal taxpayers, he added.
"If the NBR succeeds in collecting the amount, the government's dependence on external borrowing will reduce," he noted.
Bangladesh Tax Lawyers' Association President Suhrab Uddin said that according to the existing income tax, Customs and VAT laws, such cases were settled through negotiations or through the High Court.
Cases which go through the High Court take a long time to be settled and most of the large companies take advantage of the process, he said.
'The NBR should be more cooperative to settle such cases and should focus on longstanding cases that involve large amounts rather than harassing marginalised taxpayers,' he said.
'If needed, the government should reform the existing policies to ensure a quick settlement of such cases,' he said.
What is ADR: Alternative dispute resolution or ADR is a short-term dispute resolution process that goes beyond the court-ordered process, wherein both the cost and time of the taxpayer is saved. The government is also able to collect revenue quickly. Cases pending in Appellate, Tribunal, High Court and Supreme Court can be settled through ADR.
A settlement agreement is reached through conciliation between the taxpayer and representatives of the tax department, mediated by a neutral facilitator appointed by the NBR.
