More firms to come under NBR's large taxpayers unit
The National Board of Revenue is considering bringing in some big firms under the purview of Large Taxpayers Unit and de-listing smaller ones to ensure effective monitoring and compliance.
The LTU is a field office responsible for collecting VAT from big companies. The unit was formed in 2004 to provide better services to the high tax-paying companies so that the state gets the correct amount of revenue from them.
“Small firms do not have high tax potential. So we are considering bringing big firms under the LTU and listing the small ones with other field offices based on a policy,” NBR Chairman Md Nojibur Rahman told The Daily Star on Saturday.
At present, in-house discussions are going on, he said, adding that a decision will be taken after reviewing the pros and cons.
The initiative comes after the revenue authority found that a number of companies remain out of LTU's purview despite paying high amounts of tax. At the same time, some businesses remain under the purview of the unit although they pay less than the required amount of tax.
As per the selection criteria set by the NBR in 2012, if a firm pays Tk 5 crore to the state coffer in a year for the previous three years, it will be eligible for listing with the LTU.
Sister concerns and associated firms of a company can also be listed under the LTU as per the criteria.
The LTU collects more than half of the total annual VAT and supplementary duty from domestic economic activities.
At present, 170 firms, mainly from the tobacco, gas, telecom, banking, pharmaceuticals, electricity distribution, beverage, cosmetics and toiletries, cement and ceramic sectors, are listed under the field office.
Of the listed firms, 157 are active, paying Tk 36,695 crore as VAT in the last fiscal year.
VAT receipts from firms under the LTU comprised 55 percent of Tk 56,080 crore collected in total in 2015-16, according to data from the NBR.
On several occasions earlier, the LTU urged the revenue administration to list firms that generate high taxes under its jurisdiction and delist those that pay less than the threshold amount.
Citing the selection criteria, the field office said many companies have expanded businesses in the last several years by establishing new units. But these newly established sister or associated concerns were not listed under the LTU. The field office earlier urged the NBR to bring in Le Meridien Dhaka, Abul Khair Tobacco, Pran-RFL and Lafarge Surma Cement under its net.
It also said listing of Radisson Blu Chittagong Bay View and the luxury hotels in Cox's Bazar would be logical.
“We will be able to provide better services and ensure proper monitoring if all five-star hotels are brought under the LTU,” said LTU VAT Commissioner Md Matiur Rahman.
He said if the sister concerns are listed with different field offices, it becomes tough to oversee their activities.
“It is good to list sister concerns under the LTU for the interest of the companies and the state coffer,” said Rahman.
Conversely, the commissioner said there are about 34 companies that should not be under the LTU as they pay less than Tk 5 crore in tax.
The firms that paid less than Tk 2 crore tax between 2013-14 and 2015-16 include Miracle Industries Ltd (unit-2), Interspeed Advertising, Bengal Packages, Mutual Food Products and GA Company, according to NBR data.
The NBR brought Petrobangla and Akij Cement under the LTU in 2015. Last year, the LTU called for bringing four sister concerns of Olympic Industries under its jurisdiction as well.