Banks dominate list of top corporate taxpayers

Country’s bank sector with eight private commercial banks dominated the list of top-10 highest corporate taxpayers in last fiscal year (2018-2019) despite a cut in the corporate tax rate for the sector.

The 10 highest corporate taxpayers paid a total of Tk 5,843.44 crore in corporate income tax in FY19 with 18 per cent growth compared with that of previous fiscal year when the contribution was Tk 4,955.06 crore.

The entities on the list remained the same in last fiscal year with mobile operator Grameenphone at the top.

The same companies constituted the list in the previous fiscal year (2017-18).

Income tax payment by GP increased by around 31 per cent to Tk 2,406.84 crore in FY19 from that of Tk 1,839.70 crore paid by the mobile operator in FY18, according to the large taxpayers’ unit (LTU) of the National Board of Revenue.

The other nine top corporate taxpayers under the LTU of the NBR include Islami Bank Bangladesh, Standard Chartered Bank, National Bank, HSBC, BRAC Bank, Trust Bank, United Commercial Bank, Pubali Bank and British American Tobacco Bangladesh.

Income tax payment by banks, however, posted a mixed performance as tax payment by five banks increased while three other banks’ contribution to the government exchequer declined in FY19 compared with that of previous fiscal year, according to the LTU data.

The NBR in FY19 lowered the corporate income tax rates by 2.50 per cent for banks.

Income tax payment by IBBL dropped by Tk 17.57 crore to Tk 575.07 crore in FY19 from Tk 592.64 crore in FY18, the data showed.

The bank also slipped to the third position in terms of tax amount on the list of top-10 corporate taxpayers in the year from the second position in the previous year due to a decrease in tax payment by the bank and a big jump in tax payment by BATB.

BATB paid Tk 812.36 crore in corporate income tax with 47.60 per cent growth in the year than the previous year when it paid Tk 550.35 crore.

Tax payment by Standard Chartered Bank and Pubali Bank also dropped to Tk 457.30 crore and Tk 199.63 crore respectively in FY19 from that of Tk 461.54 crore and Tk 257.20 crore in FY18.

NBL, HSBC, BRAC Bank, Trust Bank and UCB paid higher taxes in FY19 compared with that in the previous fiscal year.

NBL paid Tk 302.46 crore in FY19 against Tk 289.30 crore in FY18, HSBC paid Tk 313.49 crore against Tk 286.19 crore, BRAC Bank paid Tk 296.69 crore against Tk 259.53 crore, Trust Bank paid Tk 248.35 crore against Tk 200 crore and UCB paid Tk 231.25 crore against Tk 218.61 crore.

A senior income tax official told New Age that corporate tax payment by some banks, including three on the top-10 taxpayers list, dropped in last year due to a cut in the corporate tax rate in the budget for FY19.

The LTU could have collected at least another Tk 2,500 crore from banks and financial institutions unless the government cut the rate, he said.

Tax payment by some banks did not increase in the year though they made comparatively higher profits in the calendar year 2018, officials said.

Though banks maintain their accounts following calendar year, the NBR maintains the tax payment record following fiscal year, they said.

The overall revenue collection by the LTU, however, stood at Tk 18,650 crore in the year against the target of Tk 20,245 crore.

There are some 281 companies under the LTU while some 706 individuals, mainly sponsor directors of banks, pay taxes under the unit.