Major income tax cases involving around Tk3,500 crore revenue have remained unsettled although three years on since the launch of alternative dispute resolution system in 2012.
There were a total of 478 cases related with income tax disputes involving more than Tk4,500 crore, of them, 450 cases were decided through the ADR in last three years, official data shows.
But most of the resolved cases involved petty amounts as they helped the NBR get only Tk116 crore. The unsettled 28 cases amount to the rest of the figure – nearly Tk3,500 crore.
Officials said there is a little interest among the taxpayers to settle the big cases.
In the past three years, the NBR realised a “very dismal” figure of revenues – some Tk120 crore including the income tax’s Tk116 crore, using the ADR. It indicates that the collections from other two deparments – value added tax and customs duty – were some Tk4 crore only.
The total number of cases referred to the ADR was 571 – income tax 478, VAT five and customs duty 88. The total amount of revenue involved Tk4,637 crore - income tax Tk4,568 crore, VAT Tk59 crore and customs duty Tk9 crore.
The settled cases were 518 – income tax 450, VAT one and customs duty 67. The realised amounts totalled some Tk120 crore – income tax Tk116 crore, VAT Tk590,000 and customs duty Tk3.35 crore.
The realised amount is less than 3% of the total figure referred to the ADR.
Officials said the collection of revenue from the cases resolved using the ADR was “very dismal” compared to the total figure as a large amount has remained still undecided.
Currently, a total of 24,572 cases are pending with the Supreme Court, which involve an amount of Tk30,947 crore revenues in income tax, customs duty and VAT.
The NBR data shows that the pending revenue with court cases is 17.55% of the total revenue target for the current fiscal year.
The VAT wing still has 3,226 cases unresolved which amount to Tk17,938 crore revenue, the highest of all other wings, followed by income tax with Tk8,183 crore revenue in 3,876 cases and customs duties with Tk4,825 crore revenue in 17,470 cases.
The tax authorities have identified five core reasons on why tax issues are taken to the courts and why settlement of such cases becomes slow.
The reasons include definitional differences on legal issues between taxpayers and the tax law enforcers, tendency to delay tax payment, lack of benches in the High Court to settle tax cases, lack of law officials required to deal with tax cases in the Attorney General Office, and procedural complexities in getting certified copies of case documents.
During a seminar on revenue suit management and alternative dispute resolution on Tuesday, Chief Justice Surendra Kumar Sinha pointed to a number of challenges including insufficient dedicated benches at the High Court, manpower shortage at the Attorney General Office and lack of skilled lawyers for speedy settlement of revenue related cases for such a poor situation.
The Chief Justice put emphasis on modernisation of existing laws, changes of attitudes of taxmen, expansion of tax base to upazila level, and strengthening the Law Commission to ease backlog of cases.
Appointment of law officials to deal with tax cases, training to legal officials on income tax, customs and VAT laws; bringing amendment in laws if required and prioritising cases for settlement which involved a huge amount of revenues are some of the recommendations that the NBR has provided to imrove the situation.