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Bangladesh - 4 weeks ago

13.36pc revenue budget owed to two institutions

Dues of Petrobangla-BPC

Mahfuz Emran: The revenue due to the two institutions is about Tk 54 thousand crores. This money is not being collected for years. Although the meeting and decision to collect dues did not see the light of day. The two organisations are the state-owned Bangladesh Oil, Gas and Mineral Resources Corporation (Petrobangla) and Bangladesh Petroleum Corporation (BPC).
The revenue target of the National Board of Revenue (NBR) for the current financial year 2023-24 is Tk 4 lakh 10 thousand crores.
NBR officials say that 13.36 percent of the target given to NBR would have been met if the dues of the two institutions were collected.
Again, according to the CAG audit, only Petrobangla is owed about Tk 70 thousand crore. NBR officials believe that if this amount is collected, 17.27 percent of NBR’s target would be met. A meeting was recently held at the NBR to collect the dues of Petrobangla and BPC.
Several decisions have been taken to recover dues. This information is known from NBR sources. According to sources, a meeting was held at NBR’s conference room on May 20 this year regarding the outstanding revenue of Petrobangla and BPC’s marketing agency. It was presided over by NBR chairman Abu Hena Rahmatul Munim. Finance Secretary, Secretary of Energy and Mineral Resources Department, Chairman of BPC, Chairman of Petrobangla, members of Income Tax, VAT and Customs Department of NBR, representatives of Custom House, VAT Commissionerate and officials of BPC’s marketing organizations were present in the meeting. In the meeting, it was said on behalf of NBR, the amount of revenue due to Petrobangla, BPC and its marketing companies is Tk 54,775 crores. Out of this, Tk 17,003 crores of customs, Tk 13,550 crores of income tax and Tk 24,221 crores of VAT are outstanding.
The representative of Chittagong Custom House said in the meeting that Chittagong Custom House owes Tk 14 thousand 713 crore 51 lakhs to Petrobangla. This arrears are due to import of LNG. There is no pending case related to arrears. As a result, this arrear is considered absolute. Secretary of Energy and Mineral Resources Department and chairman of Petrobangla, who were present in the meeting, said that if the amount due in electricity and fertilizer sector is paid, all the arrears of NBR can be paid. However, if the finance department provides a special allocation, this arrears will be paid. It was decided in the meeting that Petrobangla will take measures to pay the dues quickly.
On the other hand, the arrears of Chittagong Custom House and Rangpur VAT Commissionerate to BPC’s marketing institutions are Tk 2,2990 crores. In the meeting, the representative of Chittagong Custom House said that the dues of Chittagong Custom House to the institutions of BPC are Tk 2,067.69 crore. This includes Tk 808.54 crores of Meghna Petroleum, Tk 6 crores 25 lakhs of Standard Asiatic Oil, Tk 633 crores 19 lakhs of Padma Oil, Tk 447 crores 87 lakhs of Jamuna Oil and Tk 171 crores 84 lakhs of Eastern Refinery. In the meeting, the representative of Rangpur VAT Commissionerate said that the dues of this commissionerate to BPC institutions are Tk 222 crore 70 lakhs. Among them, Padma Oil has Tk 802.2 crore and Meghna Petroleum Tk 941.5 crore and Tk 483.27 crore in absolute arrears.
In the meeting, a request was made to ‘provide necessary allocation for collection of arrears in the import duty sector’. NBR member (Customs Policy and ICT) said in the meeting, NBR has to collect additional tax at the rate of 0.5 percent of GDP every year. It is not possible to achieve the target of NBR if the amount due to Petrobangla and BPC is not paid. As a result, he requested the Finance Secretary to allocate necessary funds to the Ministry of Energy and Mineral Resources to pay the arrears as import duty. The Secretary of the Finance Department informed the meeting that a part of the budget allocation given to the Energy and Mineral Resources Department is used for collection of outstanding duties, so that the Finance Department can provide the allocation by imposing conditions. On the other hand, NBR member (Tax Administration and Human Resource Management) told the meeting that Tax Zone-8, Dhaka owes Tk 250 crore 94 lakh to Petrobangla. Of this, Tk 64 crore are undisputed. Chairman of Petrobangla said that it is possible to pay this outstanding amount in the current financial year 2023-24 and necessary measures will be taken to pay it very soon.
On the other hand, in the meeting NBR member (VAT implementation and IT) said that LTU (VAT) due to Petrobangla is Tk 22,584 crores. Former Finance Minister Abul Mal Abdul Muhith held a meeting at the Secretariat on March 14, 2017 to collect Petrobangla dues. It was decided in the meeting that after the completion of the audit of Comptroller and Auditor General Office, measures will be taken from the Finance Department regarding the payment of the previous arrears of Tk 13,278 crores (without interest) through book adjustment. In the meeting, the finance secretary agreed to implement the minister’s decision. Petrobangla will take necessary steps to pay the remaining arrears in the financial year 2023-24. Besides, it was decided in the meeting that the finance department will take measures for the remaining outstanding revenue book adjustment for the next fiscal year 2024-25.
On the other hand, according to the audit report of the Office of the Comptroller and Auditor General (CAG) of Bangladesh, the amount of revenue owed to Petrobangla is about Tk 70 thousand crore with interest. According to NBR sources, a meeting was held under the leadership of the finance minister on March 14, 2017 to collect the due tax from Petrobangla through book adjustment. It was decided in the meeting that book adjustment of Tk 16,774.23 crore of outstanding revenue of LTU (VAT) was decided. In addition, it was also decided that Petrobangla will pay this amount through book adjustment in several other meetings. Based on that decision, the Office of the Comptroller and Auditor General prepares an audit report on the outstanding revenue. The Comptroller and Auditor General’s Office completed the audit of Petrobangla from 1997-98 to 2016-2017 (till December 2016). It has been seen that Petrobangla has a total of Tk 70,796.06 crore with Tk 25,928.03 crore for VAT and supplementary duty and Tk 44,868.03 crore for interest. That is, the amount of outstanding revenue in 20 years from 1997-98 to 2016-17 fiscal year is Tk 70,796.06 crore. However, non-payment of principal dues may result in further interest charges. However, Petrobangla has paid some government dues at various times. Till July 2021, LTU’s outstanding amount to Petrobangla is Tk 22,584.54 crore without interest.

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