Travel tax collection falls, pvt airlines blamed
New strategy from next fiscal

Doulot Akter Mala

The National Board of Revenue (NBR) is set to frame a new strategy from the next fiscal to collect travel tax, as it has detected a continued negative growth in this sector due to non-payment of taxes by local private airlines, sources said.

In the first seven months of the current fiscal, travel tax collection posted a 10.74 per cent negative growth with Tk 320 million pending from the corresponding period last year, it was learnt.

Until January, the revenue board collected Tk 2.12 billion travel tax, which was Tk 2.38 billion in the same period last year.

The board is planning to pass the responsibility of travel tax collection to the civil aviation department instead of the airline operators from the next fiscal. The change may find place in the budget for fiscal 2010-2011.

Tax officials have said they have planned to take action against the private airline companies which remained defaulters for long.

"We are going to take action against a local private airline operator through suspending its operation for not responding to the revenue board's repeated warning to clear the dues," said a top tax official.

The tax zone concerned has issued warning letters seven times in the current fiscal to deposit the tax, he said.

The official pointed out that sluggish growth of the travelling sector and decline in number of airline passengers are the major causes of the fall in travel tax collection.

Travelling has dropped to one-third of the normal frequency due to the impact of global recession on the country's economy which has led to a slump in the aviation sector, he added.

The number of private airline operators also dropped to two out of nine last year.

According to travel tax law 2003, all airline operators have to deposit travel taxes collected against each ticket every month with detailed statistics of the number of travellers.

The NBR can impose penalty at 2.0 per cent every month for delay in depositing the taxes.

The law has empowered the revenue board to freeze bank accounts of airline operators and suspend their flight permission through the civil aviation authority.

The National Board of Revenue has failed to achieve its target of travel tax in the last year.

Last year, the travel tax collection dropped by 30 per cent compared to that of the previous fiscal. The NBR received Tk 4.13 billion travel tax last year, while it was Tk 4.43 billion in 2007-08.

The NBR has set a target of Tk 4.69 billion in travel taxes in the current fiscal.

"We are seriously monitoring the matter of decline in travel tax collection. An NBR team is monitoring the issue of realising the pending taxes as soon as possible," said the income tax official.