Tax disputes of Tk 19,000cr pending at higher courts

The collection of nearly Tk 19,000 crore in direct taxes has been stuck at higher courts owing to cases filed by large corporates, some individuals and taxmen, according to the Large Taxpayers Unit (LTU) of the income tax department.

This involves a total of 1,051 cases, including 116 writs and 870 reference cases, which are pending in the higher courts and thus causing delays in the realisation of taxes by the LTU, the main collector of direct tax for the National Board of Revenue (NBR).

This was shared at a discussion organised by the LTU at its office yesterday in order to expedite the settlement of the cases in top courts and realise the tax.

NBR Members -- Taxes Legal and Enforcement Ahammad Ullah and Taxes Appeal and Exemption Md Iqbal Hossain -- took part in the meeting, where Additional Attorney General Sk Md Morshed spoke.

"It was like an ice-breaking meeting. We want to work more closely with the attorney general's office in order to quickly settle the cases," said Md Iqbal Bahar, commissioner of the LTU, after the meeting.

The field office under the income tax wing of the NBR deals with 1,313 tax files, mainly large taxpaying firms, including banks, non-bank financial institutions, insurers, telecom companies, manufacturers and pharmaceuticals, and 860 high tax paying individuals.

The LTU collected Tk 25,858 crore in taxes in fiscal year 2022-23, which was one-fourth of the total income tax logged by the revenue administration that year.

The field office settled Tk 1,500 crore worth of tax disputes as of June this year through alternative dispute resolution, an out of court settlement mechanism.

Bahar said there has been a gap in communication between the NBR and the attorney general's office, and this has to improve in order to quickly resolve the cases stuck in higher courts.

A senior official of LTU said most of the cases are of similar nature or analogous, and could be resolved easily if proper steps are taken.

The 860 reference cases involve over Tk 17,000 crore of tax disputes, according to LTU data.

The tax administration has filed 394 reference cases, involving Tk 8,540 crore of tax disputes.

Taxpayers filed 476 reference cases challenging the claim of nearly Tk 8,720 crore in tax by the tax department.

At the discussion, Additional Attorney General Morshed suggested the LTU open a liaison office to improve communication between the attorney general's office and field offices of the NBR, according to a press statement.