At least 12 entities under the Ministry of Power, Energy and Mineral Resources owe approximately Tk55,000 crore in unpaid taxes to the National Board of Revenue (NBR), which accounts for more than 13% of the NBR’s total revenue target for the current fiscal year of 2023-24.

Given the International Monetary Fund’s (IMF) conditions and the overall economic situation, boosting revenue collection is crucial. In light of this, special initiatives are being taken to recover these overdue taxes as part of the government’s efforts to meet the revenue target for the 2024-25 fiscal year.

A preliminary decision has been made to transfer at least Tk16,000 crore directly from the budget of these entities to the NBR through the Ministry of Finance.

Sources said a meeting was held last Monday at the NBR conference room, chaired by NBR Chairman Abu Hena Md Rahmatul Muneem, to devise strategies for recovering these outstanding taxes.

The meeting included NBR members, as well as the chairmen of Bangladesh Oil, Gas and Mineral Corporation (Petrobangla) and Bangladesh Petroleum Corporation (BPC), along with managing directors and other officials from BPC’s subsidiaries.

Several decisions were made to resolve complications and accelerate the recovery of these overdue taxes. One key decision was to collect at least Tk16,000 crore through a “book adjustment” in the upcoming budget, allowing the government to directly deduct funds allocated to these defaulting entities.

However, the final decision will be made after consultations with the Ministry of Finance.

Data presented at the meeting revealed that Petrobangla alone owes Tk37,549 crore in import duties, VAT and income tax. Additionally, BPC owes Tk6,899 crore, Titas Gas Tk2,284 crore, Padma Oil Tk2,145 crore, Sylhet Gas Tk1,735 crore, and Meghna Petroleum Tk1,028 crore, with several other entities also having pending tax liabilities.

It was also revealed that despite collecting Tk24,221 crore in VAT from customers, entities like Petrobangla and BPC did not deposit the amount with the NBR. They also owe Tk13,550 crore in income tax and Tk17,000 crore in import duties, which remain unpaid beyond the deadline. The total outstanding taxes owed by these entities amount to Tk54,775 crore.

As per IMF requirements, the government needs to collect Tk4,78,000 crore in tax revenue in the upcoming fiscal year. The NBR is responsible for nearly all of this revenue collection.

Preliminary estimates indicate that the NBR will need to collect around Tk70,000 crore more next year than in the current fiscal year. Recovering Tk55,000 crore from unpaid energy sector taxes will make this task significantly easier.

Former NBR Chairman Muhammad Abdul Mazid told journalists that tax defaults by government entities create macroeconomic management problems, hindering the increase of the tax-to-GDP ratio.

“If these entities had paid their taxes transparently, the government would not have needed to borrow as much. The government must address this issue to protect its interests. Ensuring transparency within these entities will also boost revenue collection,” he said.

Abdul Mazid further said, “If additional dividends from these government-owned entities are secured to cover public expenditure, NBR’s revenue targets could be reduced, easing the tax burden on the public. These areas need more attention.”

Source: Samakal