State bankers want same tax on income as other government employees

Bankers at five state-owned banks pay higher taxes compared to other government employees only because the banks are public limited companies – although they all get salaries under the same pay structure. 

A government employee pays income tax only on basic salary, festival allowance and bonus, but bankers at Sonali Bank, Janata Bank, Agrani Bank, and Bangladesh Development Bank Limited pay taxes on other allowances too, such as housing, medical and tiffin allowances and even on their contributory provident funds.

Bankers have repeatedly requested the authorities concerned to tax them equal to government employees, but no initiative has come into view yet. 

In the latest effort to fix their taxable income, managing directors of the banks sent a letter to the Financial Institutions Division on 16 September.

The government has a cent percent stake in Sonali, Janata, Agrani, and BDBL and a little over 90% of Rupali Bank. Employees at these banks get salaries and allowances as per the eighth national pay scale-2015. 

Yet, the National Board of Revenue (NBR) realises income taxes from them, considering them private company employees, according to the letter. 

Bank managing directors said the vehicle maintenance fee of Tk50,000 per month that entitled government officials get is not taxable, but bank executives have to pay taxes on it, much to their frustration.  

On many occasions, the NBR freezes salary accounts of bank employees, whose income is taxable, and debits their accounts when it finds their income tax submissions lower than its calculated payables considering them of private limited companies, said the MDs. 

In 2019, bankers sent a letter to the Financial Institutions Divisions, seeking measures to bring an end to extra taxation. Later, the Finance Division was asked to give an opinion on it. 

The Finance Division suggested that the same taxation rule as for government employees be applicable to bankers at Sonali, Janata, Agrani, Rupali and BDBL as they also get paid as per the national pay structure.

In July that year, the Financial Institutions Division sent a letter to the revenue board, suggesting that it collect income taxes from bankers the same way it does from government employees, but to no avail.  

On 16 February this year, with no positive outcome, Sonali Bank MD Md Ataur Rahman Pradhan, Janata Bank MD Abdus Salam Azad,  Agrani Bank MD and CEO Mohammad Shams-Ul Islam, Rupali Bank MD Obaidullah Al Masood, BDBL MD Kazi Alamgir met with Abu Hena Md Rahmatul Muneem and requested him to take necessary steps in this regard. The NBR chairman assured them of looking into the matter.

But to date, the NBR has not issued any effective directive or Statutory Regulatory Order yet.

In 1986, Rupali Bank was converted to a public limited company with over 90% government share.  Towards the end of 2007, the government turned Sonali, Janata and Agrani into private companies as per the recommendations of the World Bank and IMF. Two years later in 2009, BDBL started its journey as a public limited company following the merger of Bangladesh Shilpa Bank and Bangladesh Shilpa Rin Sangstha.