Taxmen collect Tk 149b from large taxpayers in FY ‘17

Banking, business majors' profits boost corporate tax

Doulot Akter Mala | Published: July 16, 2017 08:05:06 | Updated: October 22, 2017 12:37:02

Increased profits netted by major commercial banks and big companies yielded higher revenues for government exchequer by over 7.0 per cent in the immediate-past fiscal.

Officials said the corporate-tax collection by the Large Taxpayers Unit (LTU) under income tax wing of the National Board of Revenues (NBR) marked a fair growth in the just-concluded fiscal year (FY) due to increase in profits of the major commercial banks and large businesses.

According to provisional figures, the LTU collected Tk 149 billion in income tax in FY 2016-17, up by nearly Tk 10 billion from previous year's figure.

Corporate-tax collection was Tk 139.11 billion and Tk 144.81 billion in 2015-16 and 2014-15 respectively.

However, target for the unit was Tk 175 billion as per original estimate of revenue target of Tk 2.03 trillion handed to the NBR.

Although the government revised the aggregate revenue- collection target downward to Tk 1.85 trillion, it was not reset in the field-level tax offices.

Officials in the unit said multinational companies (MNCs) under the unit paid advance tax worth Tk 18 billion in 2015-16 due to change in their income year in the budget for that year.

As per that budget, all companies, bar banks and non-banking financial institutions (NBFIs), had to follow July-June income year.

However, the measure went through a change in 2016-17 budget following difficulties facing the MNCs.

Now, MNCs and their subsidiaries can follow the income year as per their parent companies.

A senior official of the unit said tax collection could have been much higher last year had the advance tax not been paid that year.

"The LTU has intensified monitoring, audit and motivation activity to increase revenue collection despite all odds and having a few number of companies," he added.

Some 60 per cent of the income tax of the unit comes from country's commercial banks.

In January-June 2017 period, operating profits of the country's private commercial banks (PCBs) showed an uptrend.  

Fifteen major banks posted higher growth in their operating profits due to a rising trend in private-sector credits.

Banking-insiders said the declining trend in interest-rate spread, however, put a drag on the overall operational profits of the banks.

The weighted average spread between lending and deposit rates came down to around 4.0 to 5.0 per cent in recent times.

Banks may see the upward growth in operating profits in the July-December 2017 period by reining in non-performing loans, bankers said.

The NBR opened LTU on income tax in 2003 with the support of development partners to deal with the business biggies in case of taxation.

All of the banks, NBFIs, insurance and investment leasing companies and mobile-phone companies are the major taxpayers under LTU.

The unit (LTU) bags the highest amount of revenue among the tax offices as taxpayers under the unit are monitored intensively to collect due taxes.

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