Meeting held to settle Petrobangla’s Tk 20,000cr VAT arrears

Staff Reporter :
The Ministry of Power, Energy and Mineral Resources has called intra-ministerial meeting to settle Petrobangla’s Tk 20,000 crore VAT arrears to the National Board of Revenue (NBR).

NBR official sources said the state-owned oil and gas company owes over Tk 20,000 crore as Value-Added Tax (VAT) arrears to NBR until 07 August 2021.

Non-payment of such a large amount of dues revenue left an adverse impact on the NBR’s effort to increase the tax-GDP ratio and mobilise the targeted tax revenue.

But the Petrobangla officials said the company is unable to pay the huge amount of VAT under its current financial condition.

However, there was a decision of Finance Ministry on March 14, 2017 to settle the dues of Petrobangla through book adjustment.

The 38th Parliamentary Standing Committee meeting of the Ministry of the Power, Energy and Mineral Resources also recommended to take necessary step to pay the amount to the revenue board.

But the decision remained unimplemented and the NBR sent letter to the ministry requesting to pay the money through Book Adjustment. Under this circumstance, the ministry called an intra-ministerial meeting to settle the issue.

NBR officials said it is their duty to take punitive action against non-compliance
of any taxpayers such as freezing bank accounts to realise dues. But in the case of Petrobangla, nothing could be done taking uninterrupted supply of fuel oil into consideration.
Following non-compliance, the large taxpayers unit (LTU) under VAT wing sent a letter, dated July 28, 2022 to Petrobangla chairman.

In the letter, LTU commissioner requested the company to take necessary steps to pay the arrears by arranging allocations from finance division.

Preferring anonymity, a senior Petrobangla official said the entity is unable to pay the arrears under its current financial condition as it sells fuel oil at lower prices than that of its purchasing prices as per tariff set by the Bangladesh Energy Regulatory Commission (BERC).

NBR officials said such a large amount of dues is a major barrier to achieving revenue collection target.

The target has been set projecting tax collection from some major sectors like Petroleum, cigarette and mobile phone.