Legal redress for VAT payers gets costlier

Aggrieved taxpayers will now have to pay four times higher in value-added tax for filing appeals against the assessment of the National Board of Revenue because of a new measure included in the proposed budget for the next fiscal year.
Finance minister AMA Muhith has brought an amendment to the Value-Added Tax Act-1991 through the proposed Finance Bill 2016 tabled in the parliament on June 2, raising the amount of VAT to be paid by VAT payers for legal action against the decision of the NBR on VAT.
According to the proposed amendment, VAT payers will have to deposit 50 per cent of disputed VAT or penalty before making an appeal to the NBR appeal commissioner against the assessment or decision of field level VAT officials.
Another 50 per cent of the disputed VAT will be required in making an appeal to the Appellate Tribunal against the decision of the appeal commissioner, the proposed amendment states.
Currently, aggrieved VAT payers need to pay only 10 per cent of disputed amount at each stage of appeal.
Officials of the revenue board said that the decision was taken in line with the verbal instruction of prime minister, Sheikh Hasina, and decision of the National Economic Co-ordination Council headed by the finance minister to reduce to reduce the case log in courts.
The council before budget instructed the NBR to amend the law for realising full taxes from aggrieved taxpayers before they file appeals.
But the revenue board initially opposed the move stating that it would increase the cost of legal access for taxpayers.
They said that though the move would make legal access costlier for taxpayers, but it would also reduce the number of cases as many taxpayers file cases to delay their payment of taxes.
Currently, around 25,000 cases involving with Tk 31,000 crore in revenue remained pending in different courts and the revenue board has been trying to settle the cases over the years.
Tk 17,938 crore in value-added tax remains unrealised through 3,226 cases, according to the latest data of the NBR.
VAT payers, however, need not pay any amount for filing appeals with the High Court.
The amount in payment seeking legal redress, however, remained unchanged.
In case of income tax, a taxpayer needs to deposit 10 per cent of the disputed tax for filing appeals to the appeal commissioner and Appellate Tribunal.
For filing a reference case with the High Court, a taxpayer needs to pay 25 per cent of disputed tax.
On the other hand, an importer or exporter needs to deposit 50 per cent of the demanded tax or penalty for getting access to the appeal commissioner and tribunal of the NBR.
Before 2004, taxpayers needed to pay the full amount of demanded customs duty or penalty for getting access to the legal process.

News Courtesy: www.newagebd.net