The country’s top telecommunications service provider Grameenphone has cleared all its corporate income tax disputes with the National Board of Revenue (NBR) through the alternative dispute resolution (ADR).
To settle the issue, the multinational telecom giant on Sunday entered into a deal with the NBR’s large taxpayers unit (LTU) for resolving the tax disputes from the assessment year 2007–08 to 2019–20.
The listed company on Monday, just a day after the agreement signing, paid the entire tax liabilities worth Tk 783.32 crore to the exchequer through a pay order.
Confirming the issue, Yasir Azman, chief executive officer (CEO) at GP, sent a letter to the LTU tax commissioner yesterday.
All the outstanding tax matters, disputes, and demands charged against Grameenphone in 13 years to FY20 by the NBR, will now be considered fully settled, according to the letter.
“We request that the LTU accept this payment as the conclusive resolution of the said disputes,” the GP chief executive officer wrote in the letter.
“We are also requesting you (LTU) issuing a fresh assessment order (IT-88), a tax computation (IT-30), and a demand notice (IT-15) after giving effect to the ADR by June 20, 2023. We are also requesting that you share with us the A-Challan with a year-wise breakdown after giving effect to IT-30,” the letter read.
NBR sources familiar with the matter said based on the said ADR agreements, once the tax payable is deposited by GP to the government treasury or handed over in due course within the prescribed time period determined in the respective ADR agreements, the same will be considered a full and final collection of the dues in the said matter as well as conclusive under the Income Tax Ordinance 1984.
GP officials said the company would like to express their gratitude to LTU-Tax for showing a positive and solution-oriented mindset to resolve the long-pending disputes between GP and LTU-Tax through a lawful and transparent ADR process.
An alternative dispute resolution (ADR) is a process of resolving disputes between two or more parties within the shortest possible time without any court trial.
This system refers to a holistic and multilateral discussion with the third party about resolving disputes.
This benefits both the taxpayers and the government. It reduces the cost of trial as well as facilitates the government’s revenue collection within the shortest possible time.
This is a speedy way of resolving disputes. Following a global trend of success with ADR in tax administration, Bangladesh introduced this method back in the fiscal year 2011–12.
Besides, LTU-VAT, through a letter issued on May 16, 2012, claimed Tk 1,580 crore to Grameenphone against its replacement SIMs from the period July 2007 to December 2011.
The claim includes an interest of Tk 545 crore as well.
The exchequer asked the company to pay the amount alleging that it had evaded SIM tax by selling new connections in the name of replacement SIMs.
The demand was based on extrapolating the outcome of only five randomly purchased SIMs by LTU-VAT.
GP, however, had challenged the issue in the High Court, and the court on June 6, 2013, had disposed the case asking the LTU-VAT to decide the matter within 120 days and make no demand in the meantime.
Subsequently, a SIM Replacement Review Committee (SRRC) was constituted, and in January 2014, the LTU had finalised their observations without changing their earlier position significantly.
The multinational company got listed on the Dhaka bourse in 2009. The company’s paid-up capital is Tk 1,350 crore.
The country’s biggest network services provider suffered a 3.8 per cent year-on-year profit decline in the January-March quarter of the year 2023.
The listed multinational firm reported Tk 779.12 crore in its net profit in the first quarter this year against Tk 810.18 crore in the same quarter last year.
The large-cap company, however, witnessed a 2.8 per cent year-on-year growth in its revenue to Tk 3730 crore in the January-March quarter this year.
The majority of Grameenphone shares are owned by Norway-based Telenor, holding a 55.8 per cent stake, while local firm Grameen Telecom owns 34.2 per cent of the company’s shares.
Institutional and general investors hold the remaining 10 per cent of the company’s shares. GP shares closed at Tk 286.60 per share on the DSE on Tuesday.
