The National Board of Revenue (NBR) expects to mobilise Tk 83.65 billion in additional revenue from large taxpayers in the second half of the current fiscal year by resolving legal disputes and 4G licensing.
The Value Added Tax (VAT) wing of the National Board of Revenue eyes this amount, as its Large Taxpayers Unit (LTU) in its recent performance report placed the target of collecting the blocked revenue, in addition to taxes on the telecom-technology licensing.
The unpaid large tax amount is due from the state-owned Petrobangla and mobile-phone companies.
Experts and officials said the estimated additional amount of revenues, if finally received, would help government minimise the projected revenue shortfall due to the deferment of the new VAT and Supplementary Duty (SD) Act.
Having jettisoned the new VAT law under duress, Finance Minister AMA Muhith projected a shortfall worth Tk 200 billion in tax-revenue receipts against the target set for the current Fiscal Year (FY), 2017-18.
Of the estimated additional amount of revenue, the unit expects to realise Tk 45 billion in arrears from Petrobangla and Tk 5.0 billion as VAT at a rate of 7.5 per cent against 4G (fourth-generation) technology licences to be issued by the government agency concerned to the telecommunications companies.
The LTU, which contributes 56 per cent to aggregate VAT collection, recently submitted the report on its performance in the first half (H1) of the current fiscal and work plan for the second half to the NBR.
The unit achieved 18.73 per cent growth in VAT collection in the H1 compared to that of the corresponding period, according to the report.
It collected Tk 198.74 billion in VAT from the large businesses in the July-December period of the FY 2017-18 against Tk 167.38 billion in the corresponding period.
However, revenue-collection target has been set for the unit expecting 35 percent growth over the corresponding period.
For the January-December 2018 period, or H2, the unit also targets taking some Tk 1.5 billion from the mobile-phone companies as VAT against space rent.
Also, some Tk 150 million would be realised from Robi Axiata as Supplementary Duty (SD) and VAT, the report says.
In the first half of the current FY, the LTU detected VAT evasion worth Tk 6.78 billion by scrutinising annual audit reports of the large businesses under its supervision.
The report also mentioned Tk 33.88 billion in revenue tucked under pending cases with the appellate tribunal and the High Court.
Hearings on two cases in the appellate division involving Tk 11.04 billion already completed.
Ten cases in the High Court division, involving Tk 23.84 billion, are also under process of settlement as already put on the cause list, according to the report.
The unit has also issued order for audit of submissions of some 64 large businesses under its supervision.
Of the companies, VAT officials had, until December 2017, completed audit of 28 and submitted report detecting Tk 13.60 billion worth of tax evasion, the report said.
The unit has collected Tk 105 million of the detected amount from the companies.
The unit has also unearthed Tk 954 million in VAT evasions in the last six months through examining VAT returns of the biggies in business.
However, the VAT officials have seen significant progress in realizing the arrears. Until November, it had realized Tk 23.25 billion in VAT arrears from the large taxpayers.
Until December 2017, the unit had issued some 12 final demand notices under section 55 (3) of the VAT law 1991 that involve Tk 10.32 billion.
Through intelligence work in the first six months of the FY, it detected unpaid revenues worth Tk 155 million lying with Grameenphone, Tk 64 million with Banglalink and Tk 180 million from other mobile-phone companies.
The LTU has also realised unpaid revenues worth Tk 201 million from Premier Bank, a private commercial bank, by freezing its bank account. A letter also has been sent to the company to explain the reason for obtaining Tk 50 billion in VAT rebate.
LTU VAT commissioner Md Motiur Rahman said the LTU's revenue collection in the first six months was on the right track.
"Overall performance of the VAT wing would impact upon the aggregate VAT- collection performance in the current FY," he said.
He sought adequate skilled manpower for the unit to gear up efforts for achieving the target.
Talking to the FE Saturday, Md Abdul Kafi, chief executive of VAT Solutions, a centre for VAT and customs consultancy and training, and former LTU commissioner, said the government should concentrate on collecting outstanding VAT from the field-level offices across the country, including in Dhaka, Chittagong, Sylhet and Comilla.
"Already, a sluggish trend in revenue collection caused a wide gap of revenue collection against its target. There might be a shortfall worth Tk 100 billion for deferment of the new VAT law for two years," he added.
The VAT wing can realize the arrears from Petrobangla but collecting unpaid taxes from telecom operators would be difficult, he added.
