The amount of taxes unpaid by Grameenphone, the largest telecommunications operator in Bangladesh, continue to pile up as the company has been disputing NBR claims about unpaid taxes.
The National Board of Revenue’s (NBR) Large Taxpayers Unit (LTU) has already sent a notice to the telecom operator in this regard.
Responding to a query, Grameenphone Head of External Communications Sayed Talat Kamal said: “We received the NBR notice. We cannot comment on the matter at this point as we are currently reviewing the notice.”
The NBR earlier issued a demand notice to Grameenphone, asking the company to pay Tk3,000 crore in due tax.
However, the company filed cases against the claims of NBR, effectively putting a stop to their payments.
Addressing the matter, NBR Chairman Md Mosharraf Hossain Bhuiyan said: “Action will be taken against Grameenphone for tax evasion. We will need an audit to know how much money the company has to pay in taxes.”
On January 25, the NBR chairman urged the officials concerned to be more sincere in collecting due taxes. He was addressing a programme marking the International Customs Day in Dhaka.
“The government exchequer will receive around Tk50,000 crore more, if the cases filed for tax evasion are resolved as soon as possible,” he added.
The NBR on Monday claimed that Grameenphone is yet to pay an amount of Tk7.25 crore in due Value Added Taxes (VAT) for renting new buildings and plots, from January to June in 2017.
According to a NRB notification, Grameenphone paid Tk48.38 crore as rent for buildings and locations in the above mentioned six month period, but the company did not pay VAT amounting to Tk7.25 crore.
NBR issued a demand notice to Grameenphone in this regard, and directed the company to attend a hearing.
However, the telecom firm did not attend the hearing, and decided to submit a written statement.
The NBR directed Grameenphone to attend a hearing for tax evasion charges yet again, but the firm instead sent a letter claiming the written statement submitted earlier is their final response.
The statement of Grameenphone reads: “According to the provision 3(3) of the VAT law, the owner of the property will have to pay the tax.”
However, this explanation is not acceptable, as the service code stipulates that tenants who are using a plot or a building commercially, must also pay the tax.
Speaking to the correspondent, an official of the LTU said: “The mobile operator firm Grameenphone has evaded tax amounting to more than Tk7 crore by not paying VAT on rent of plots and buildings.
“The company also evaded around Tk3,000 crore in other taxes.”
In November, 2017, NBR sent a letter to Bangladesh Securities and Exchange Commission
(BSEC), seeking its help to collect due VAT of Tk2,015 crore from Grameenphone.
The letter also mentioned that the mobile phone operator is making no effort to pay its taxes, and the NBR needs the BSEC’s help in this regard.
According to sources, the telecom firm is not only evading taxes, but also breaking regulations for provisioning.
As per regulations, a company must keep a provision in the main account for paying taxes, but Grameenphone did not keep it, despite being listed in the stock market.
Insiders also claimed that the firm evaded tax amounting around Tk1 crore, by selling SIM cards to customers at subsidized prices, and then showing the expenditure as business expenses to the government.
This move is illegal in the existing tax laws of Bangladesh.
NBR sources also stated that the board has found evidence of tax evasion against Grameenphone.
The firm evaded more than Tk1,023 crore in taxes by showing SIM card sales and SIM replacements, added sources.
In December, 2017, NBR issued a demand notice to Grameenphone, asking the firm to pay another Tk378.95 crore in taxes.
There are allegations that the company did not pay VAT and supplementary duty amounting to Tk348 crore on SIM cards sold from 2006 to 2007. Adding interest, the NBR is demanding Tk452 crore from Grameenphone.
The firm has also reportedly evaded taxes amounting to Tk100 crore and Tk29 crore in two phases, by using exemptions in an illegal manner.
According to NBR data, the telecommunication firm evaded VAT amounting to Tk1,023 crore using SIM replacement as an excuse. The customers had to pay Tk600 for new SIM cards in the fiscal years 2012-13, 2013-14 and 2014-15.
The value added tax on new SIMs was Tk300. However, SIM replacement services were tax free. Grameenphone abused the system, by selling new SIM cards in the name of replacements to evade taxes.
NBR also states that Grameenphone evaded taxes amounting to Tk19 crore and Tk4.8 crore on plat and building rents respectively. The company also evaded taxes amounting to Tk12.56 crore from March to December in 2016.
The NBR sources added that the telecommunications firm evaded SIM tax amounting to Tk452.53 crore from August 2006 to March 2007, Tk29.15 crore and Tk94.99 crore through illegal exemptions in two phases in 2013.
Grameenphone has disputed the NBR claims.
This article was first published on banglatribune.com