Tk 83,000 crore stuck in courts
Graphics: Agamir Somoy
Revenue arrears reached nearly Tk 83,000 crore, causing significant concern for the government. There is no way to take immediate action because the matter has moved to the courts, and there are no signs of a resolution.
To overcome this problem, an alternative path has been chosen: taking initiatives to settle cases out of court. Finance Minister Amir Khosru Mahmud Chowdhury is set to begin meetings as early as next week.
Owners of business entities with outstanding arrears will be summoned, according to information obtained from National Board of Revenue (NBR) sources.
This massive revenue arrear accounts for around 14 percent of the target for the 2026-27 fiscal year and nearly 20 percent of the collection in the previous fiscal year. The revenue collection target for this year has been set at Tk 6.04 lakh crore, while Tk 4.15 lakh crore was collected in the previous year.
As the money has not been deposited into the government treasury, the government is suffering from a financial crisis. It is now forced to approach foreign agencies and take loans under difficult conditions with high interest rates.
As a result, the government has taken extensive initiatives to collect the outstanding taxes, and a month-by-month action plan has been adopted.
Notable among these initiatives are: utilizing Alternative Dispute Resolution (ADR) to settle tax cases quickly, performing book adjustments to collect outstanding taxes from government institutions, freezing bank accounts if necessary, and pursuing certificate cases.
Moreover, amendments to the Finance Act will be introduced if there are legal complexities.
Stakeholders believed that if these initiatives can be implemented, at least Tk 30,000-40,000 crore in additional revenue could be collected this fiscal year. This would bring momentum to the country’s economy and play a role in reducing the revenue deficit.
According to them, the finance minister recently held a meeting with NBR officials regarding the collection of outstanding revenue. During that meeting, the NBR provided a list of around 50 cases. Nearly Tk 50,000 crore in revenue is involved in these cases.
According to the NBR data, a total of 5,500 income tax-related cases are ongoing, involving Tk 36,700 crore in revenue. On the other hand, 11,684 VAT-related cases are pending in various courts, where outstanding revenue is Tk 36,200 crore. Moreover, 12,335 customs-related cases are ongoing, with Tk 9,857 crore in outstanding revenue.
NBR sources said Bangladesh Petroleum Corporation (BPC) tops the list of the highest outstanding revenue in pending income tax cases. The amount stands at Tk 6,975.07 crore.
Titas Gas Transmission and Distribution PLC holds the second position with Tk 1,195 crore in revenue. In the third position is Md Almas Ali, with Tk 1,018.09 crore in outstanding revenue. Following them are United Mymensingh Power Limited (Tk 937.88 crore) and Md Mizanoor Rahman (Tk 427.71 crore).
Also on this list are Janata Bank PLC with a total of Tk 668.44 crore across two cases, Sonali Bank PLC with Tk 578.71 crore across two cases, another case involving Bangladesh Petroleum Corporation (Tk 291.12 crore), United Energy Limited (Tk 322.26 crore), Sylhet Gas Field Limited (Tk 320.81 crore), Toma Constructions Limited (Tk 274.65 crore), and Export Import Bank of Bangladesh PLC (Tk 263 crore).
In several VAT-related cases, Tk 2,453 crore is stuck with British American Tobacco Bangladesh Limited (BATB). Around Tk 2,585 crore has been claimed against Grameenphone Limited in four cases.
Moreover, claims against Nitol Motors Limited in three cases total about Tk 2,010 crore. Similarly, claims against Robi Axiata Limited in three cases total around Tk 1,067 crore. There is a claim of Tk 822.53 crore against Premier Bank Limited in one case, Tk 536.88 crore against Dhaka Tobacco Industries, Tk 532.41 crore against Banglalink Digital Communication Limited, and 266.28 crore against Meghna Petroleum.
NBR Acting Chairman Ahsan Habib told Agamir Somoy, “The government has a strong legal basis in these cases. Therefore, special cooperation from the attorney general is needed to include these cases on the High Court’s cause list on a priority basis to ensure quick hearings and settlements.”
If income tax-related cases are resolved quickly, the government’s revenue collection activities will become more dynamic and play an important role in achieving the direct tax collection target for the fiscal year.
Zahid Hussain, former lead economist of the World Bank’s Dhaka office, said, “The rule of law must be ensured in tax collection. But at the same time, cases hanging for years is not a solution.”
He added, “Unless the efficiency of the revenue administration is increased and tax cases are resolved quickly, it will be difficult to raise the revenue-to-GDP ratio.”
Zahid also suggested making the Alternative Dispute Resolution (ADR) system more effective to reduce court delays.
