The method of resolving tax disputes out of court is gaining popularity due to its time-saving and cost effective nature.
Tax disputes worth nearly Tk 500 crore were resolved between July 2012 and October 2013 through alternative dispute resolution methods, according to the International Finance Corporation.
Masrur Reaz, programme manager of the IFC-managed Bangladesh Investment Climate Fund, said ADR has been proven an effective mechanism worldwide when it comes to providing quick solutions to businesses and other disputes.
“Similarly, businesses in Bangladesh, both local and foreign, will immensely benefit from ADR mechanisms.”
IFC has helped the government develop the concept of ADR and make a mechanism to turn the system into an effective tool.
Pursued by IFC, the National Board of Revenue introduced ADR in July 2012 to help resolve tax disputes out of court. Around 50,000 tax-related cases involving over Tk 20,000 crore are pending with the courts, according to NBR officials.
Of the amount, the majority is involved with disputes related to customs duties, followed by income tax cases.
Officials said over 400 tax disputes were settled till the end of December last year. “People are coming to us to settle disputes under ADR, but their number is not very exciting,” said an NBR official.
He said the response to solving customs-related disputes through ADR has been “frustrating” but “good” in case of solving income tax-related disputes.
The official, however, said many people are yet to know about these alternative methods of resolving disputes out of court.