Conglomerates had tax exemptions on political considerations: White Paper
It stated that the excessive use of SROs (exemption benefits) has become a tool for distributing political favours
Many business groups in the country enjoyed tax exemptions through statutory regulatory orders (SROs) from the NBR with the use of political connections during the Awami League regime, according to the findings of the White Paper preparation committee.
The 12-member committee formed by the interim government submitted the final draft to the chief adviser today (1 December).
Findings suggest that at different times during the AL regime since 2009, the National Board of Revenue (NBR) had to accept orders to issue SROs upon directives from the Ministry of Finance, most of which were influenced by business groups and high-level government officials.
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Reportedly, many business conglomerates, among others, received tax exemptions based on political considerations. "Such practices have favoured politically connected groups," the paper stated.
"The excessive use of SROs (exemption benefits) has become a tool for distributing political favours, undermining the effectiveness of Bangladesh's tax policies," it added.
These advantages through tax exemption have weakened the country's tax base and enabled corruption, it stated, adding, "Frequent ad hoc changes to tax laws through SROs have worked against transparency and predictability, distorting trade and reducing revenue."
The paper also highlighted some tax exemption benefits given to businesses including Summit Group, S Alam Group, Walton and Beximco Group.
According to the paper, Summit Group in 2018 received full exemptions on project income, income earned by foreigners, royalties, technical know-how fee and technical assistant fees, capital gain arising from transfer of shares and tax on foreign interest loan under conditions of maintaining accounts and submitting income tax returns on its LNG terminal operation.
The group had also received full tax exemption for another 15 power plant projects on income arising from power generation, income earned by foreigners for three years since their arrival in Bangladesh, tax on foreign interest loan, royalties, technical know-how and assistant fees and capital gain arising from transfer of shares.
Similarly, other companies also enjoyed the exemption in various forms. The final draft of the White Paper, however, did not mention any specific amount of money involved with the exemption.
