Some common disputes between taxmen and big taxpayers create room for incremental revenue-related court cases in the country that stuck up income tax worth Tk 60 billion.
Officials said the tax revenue overdue from large corporate taxpayers under the Large Taxpayers Unit (LTU) of the revenue board remained stuck in a logjam of around 500 court cases.
Of the amount, cases filed by 25 corporate taxpayers involve Tk 31.37 billion, the sources said.
Tax officials said the trend in filing court cases by the large taxpayers "is increasing day by day, creating higher volume of stuck-up revenues".
They found a set of common reasons creating disputes between taxmen and corporate income tax-payers and thus generating newer pending court cases every year.
Unresolved disputes have been creating discomfort for both the taxpayers and taxmen over years.
Both tax officials and experts have identified disputes over expense disallowance on Zakat fund, provisioning of commercial banks and excess-profit-tax provision under the income tax rules as the major reasons for huge revenues due from large taxpayers getting trapped.
The taxmen disallow Zakat fund to be reckoned as allowable expenditure while taxpayers claim it as expenditure and seek tax waiver on the fund, tax officials said.
"Excess-profit provision was another section under which commercial banks had to pay 15 per cent additional tax on the profit if it exceeded 50 per cent of the paid-up capital of a company," said a senior tax official.
However, the provision of excess profit tax has been scrapped from the current budget.
Disputes arise with the commercial banks on the excess profit provision, he said.
Officials said almost every year the taxpayers lodge court cases or writ petitions challenging assessment of their tax files, disallowance of expenditures and also some new provisions of income-tax law.
In some cases, taxmen also file cases against taxpayers for irregularities, concealment of actual income source and non-compliance.
Majority of the large taxpayers are banks that maintain an accounting principle in line with the direction of its regulator, the central bank, another tax official in a field office told the FE.
They keep provision to manage bad loans which taxmen disallow as expenditure in accordance with the income-tax law, he said.
"There should be common rules of accounts maintenance that would be accepted by the central bank and revenue board to help taxpayers come out from the hassle," he said.
He also termed subsidy on SIM tax as another bone of contention as a significant amount of corporate tax comes from cell-phone operators.
Once SIM tax was higher than its selling price, and mobile-phone operators had shown it as subsidy and claimed it as expenditure, he said.
However, taxmen disallow such expenditure claim in the tax file as per the law.  
Tax officials and experts identified those common factors as reasons for disputes between taxmen and taxpayers.
Contacted for his view of the conundrum, tax commissioner of the Large Taxpayers Unit Md Alamgir Hossain said the unit had taken necessary steps to speed up resolving the cases involving large sums of revenue.
"We have sought cooperation of attorney general's office in resolving those cases," he added.
Sources said the unit formed a dedicated team to work only on those cases.
Some of the selected large taxpayers' cases might be placed for hearing in the next session of court, they said.
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Source: The Financial Express