The NBR has accused two Summit companies of evading Tk1,112 crore in taxes from dividend transfers. Summit insists it has complied with tax laws and has not yet received formal notice. The investigations have revealed potential discrepancies in tax deductions for dividend payments, prompting the NBR to revoke prior exemptions and enforce tax collections retroactively, encompassing potential liability of Tk647.73 crore.
The National Board of Revenue (NBR) has accused two Summit companies of evading Tk1,112 crore in taxes tied to dividend transfers. Summit Corporation Limited allegedly avoided a 20% source tax on dividends, while Summit Power International, a Singapore-based entity, reportedly evaded a 15% source tax. A representative from Summit stated that they have not received any official notice from the NBR and asserted that the company has consistently complied with tax laws in Bangladesh.
Under the jurisdiction of the NBR’s Tax Zone-2, both Summit Power and Summit Corporation are subject to scrutiny. Barrister Mutasim Billah Faruqui, the tax commissioner, indicated that a review was requested due to the preferential treatment these companies appeared to receive. He noted that undocumented tax exemption benefits were granted, raising concerns about fairness in taxation.
The allegations surfaced during an investigation encompassing major industrial groups. Initiated by the NBR’s Intelligence Cell in response to the interim government’s arrival, the investigation has uncovered potential discrepancies regarding dividend payments from Summit Power to its corporate parent.
Examination of financial data revealed that Summit Power neglected to deduct Tk318.34 crore in tax at source on dividends intended for Summit Corporation, necessitating the tax due to legislation requiring such deductions. The investigation indicated the total tax evasion may increase to Tk647.73 crore when factoring in additional findings related to the payments made to Summit Power International.
After the investigation, the NBR rescinded the previously granted source tax exemptions, instituting a 20% tax requirement on dividend payments from Summit Power to Summit Corporation, along with a 15% tax on dividends paid to Summit Power International. Faruqui emphasized that the exemptions lacked proper legal backing, necessitating the tax enforcement from prior periods.
The scrutiny extends to Aziz Khan, chairman of Summit Power International, with investigations ongoing into his financial dealings, including an order for affected family members’ accounts to be frozen. Despite challenges, Summit reported that 92% of its power generation capacity remains active, highlighting stability in operations despite the aforementioned issues.
This article addresses serious tax evasion allegations against two Summit companies involving significant sums of money, illustrating the role of the NBR in enforcing tax compliance in Bangladesh. It indicates the broader implications of the investigation on the integrity of the tax exemption processes and highlights challenges faced by major corporations in maintaining compliance with national tax laws. The circumstances also reflect on the accountability and operational transparency expected from large enterprises, particularly in the energy sector.
The allegations against Summit Corporation and Summit Power International paint a critical picture of potential tax evasion practices within major corporations in Bangladesh. The NBR’s decisive response in revoking tax exemptions signals a stringent approach toward ensuring compliance and accountability in the corporate sector. The ongoing investigations into personal financial activities of key individuals underscore the urgency for transparency and adherence to regulatory standards in business operations.
Original Source: www.tbsnews.net
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