Twenty-five banks and financial institutions have ‘dodged’ value added tax (VAT) against income from commission, fee and charge. 

The mismatch resulted in  Tk 588 million revenue loss for the state exchequer, the Comptroller and Auditor General’s (CAG) office has found out and recommended recovery of the amount lost. The CAG came across the irregularities during a special audit on the 2006-07 fiscal, conducted at the Large Taxpayers Unit of the National Board of Revenue.

 Banks and financial institutions are required to pay 15 per cent VAT on income from fee, commission and charge, as per a statutory regulatory order (SRO) of NBR, but they did not pay VAT properly in 2006. IFIC bank did not pay Tk 49.3 million, UCBL Tk 38.4 million, Dutch Bangla Bank Tk 37.98 million, and National Bank has outstanding VAT amounting to Tk 37.2 million. 

The other banks on the list are, Woory Bank, Prime Bank, Al-Arafah Islami Bank, Bank Alfalah, BASIC Bank and Social Investment Bank.

 Among the financial institutions are LankaBangla Finance, Fareast Finance & Investment, IDLC Finance, Bangladesh Finance and Investment Company, Phoenix Finance and Investment, Islamic Finance and Investment, GSP Finance Company and National Credit and Brothers.

 Even though show-cause notices were recommended to be served upon some of the institutions, the CAG’S office, however, says only claiming the money will not be enough. It is essential to recover the said revenue amount and get it deposited in the state coffers.

Source: The Independent/ Bangladesh/ 13th Dec 2011