The National Board of Revenue has withdrawn the upper limit on the number of companies to be brought under its Large Taxpayers Unit (LTU-Value-Added Tax) to bring more eligible companies across the country under the unit’s jurisdiction for ensuring proper revenue collection from the entities and providing them better services.
The revenue board has issued new guidelines on selection of taxpayers for the LTU, expanding the jurisdiction of the unit across the country, scrapping the previous guidelines issued in 2012 which restricted the highest number of companies to 200 under the unit.
The NBR issued the guidelines along with other budgetary measures on June 13 for the next fiscal year of 2019-2020.
According to the new guidelines, businesses which paid on average Tk 10 crore in VAT in last three financial years will come under the purview of the LTU.
The jurisdiction of LTU will be all over Bangladesh.
Previously, businesses running VAT-related activities from their Dhaka offices and paid on average Tk 5 crore in VAT in three financial years were considered for the LTU.
There was also a provision of setting up regional offices of the LTU to accommodate the eligible companies located other parts of the country but the NBR could not set the regional offices.
The new guidelines also said that the NBR would select the necessary number of businesses to bring them under the LTU.
Currently, a total of 170 large businesses, mainly from bank, non-bank financial institution, pharmaceutical, tobacco, electricity distribution and beverage sectors, pay VAT to the LTU which, set up in 2004, collects around 56 per cent of the total VAT collection by the NBR.
A committee headed by NBR member (VAT policy) will select the business houses for bringing them under the jurisdiction of the LTU in line with the guidelines.
The committee every year in the month between August and September will scrutinise the documents of eligible businesses and recommend either bringing or withdrawing those from the jurisdiction of the LTU.
The NBR will publish a gazette notification incorporating the names of the selected businesses.
The business house which will be excluded from the jurisdiction of the LTU will go back under the commissionerate under which geographical location the entity operates.
Officials said that the revenue board framed the guidelines to accommodate the large businesses across the country under the LTU as the number of large businesses had been increasing with the expanding of economy of the country.
The previous selection criteria was also complex as the revenue board had to consider the amount of annual turnover, paid tax and issues related to associate and subsidiary companies of the large business houses.
The LTU has also demanded bringing a number of big companies including PRAN-RFL, Lafarge Surma Cement and all five-star hotels under its jurisdiction and removing more than 32 companies paying less than the required amount of VAT to the unit.
Want stories like this in your inbox?
Sign up to exclusive daily email
More Stories from Tax