NBR to frame policy for inclusion, exclusion of cos under VAT LTU

Dhaka,  Tue,  26 September 2017
Published : 15 Aug 2017, 00:23:59

NBR to frame policy for inclusion, exclusion of cos under VAT LTU

Doulot Akter Mala

The National Board of Revenue (NBR) has decided to frame a policy to set new parameters for inclusion and exclusion of businesses under the Large Taxpayers Unit (LTU) of VAT wing.

The parameter will be set on the basis of average tax payments by the businesses in last three years.

Currently, businesses paying an average tax of Tk 50 million a year and continued for the last three years are considered as the large taxpayers under the VAT (Value Added Tax) wing.

The new VAT and Supplementary Duty (SD) Act-2012 has a provision to include businesses paying an average of Tk 100 million in last three financial years.   

After the budget proposal for implementation of the new law from July 01, the NBR had framed a guideline on selection of the large taxpayers for the unit.

The NBR had issued a new guideline on June 01 accordingly, but it remained ineffective as the government backtracked from implementation of the new law.

In a recent meeting, the VAT wing decided to frame a policy for inclusion and exclusion of businesses under the LTU.

A committee will be formed under the VAT implementation wing to include and exclude businesses under LTU after analysing their financial status, officials said.

The committee would place its recommendations to the NBR chairman in this regard, they added.

There are some businesses that should be excluded from the LTU due to fall in VAT payments while some other businesses those are scattered in many VAT offices should be brought under the LTU in respect of their business volume and VAT payments, said an official.

Many of the large organisations have obtained central electronic Business Identification Numbers (BINs), following NBR's instruction before June 30, 2017.

The official said that most of the large companies preferred remaining on central BIN as per VAT law-1991.

There were a total of 156 large businesses paying VAT under the LTU, contributing 56 per cent of the aggregate VAT collection. The number of organisations reduced to 141 after some of them obtaining central e-BIN for their multiple units.

The LTU started its journey with 171 companies. But, the number of business units came down to 156 as some of the companies' VAT payment went down for incurring losses, said the official.

All the mobile phone companies, a large multinational cigarette company, cement manufacturing companies, 17 private commercial banks and, gas and oil sector companies are major contributors to the LTU's VAT collection.

Existing selection criteria for businesses under LTU is complex as the revenue board would have to consider the amount of annual turnover, paid tax and issues related to associated and sub-subsidiary companies of the large business houses.

In 2016-17, The LTU collected the highest amount of Tk 361.84 billion and achieved highest growth of 21 per cent among the 12 VAT commissionarates across the country.

The NBR honoured the commissioner of LTU Md Matiur Rahman as commissioner of the year as recognition of his performance.

Editor : A.H.M Moazzem Hossain
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