CPA pays Tk198cr holding tax to Chattogram City Corporation

The Chittagong Port Authority (CPA) has paid Tk198.27 crore in holding tax to the Chattogram City Corporation, ending a prolonged dispute over municipal taxes between the two public entities.

The cheque was handed over to the city corporation at its Tigerpass office today (29 June). 

Chattogram City Corporation Mayor Shahadat Hossain said the payment represents 75% of the assessed holding tax, which the port authority was required to deposit under the law before its appeal against the assessment could be heard.

According to the mayor, a joint assessment conducted between February and April by six senior officials, three each from the CPA and the City Corporation evaluated nearly 19.7 million square feet of port facilities. The assessment, signed by officials of both organisations, gave it legal validity and formed the basis for fixing the holding tax at Tk264.35 crore.

"The city corporation does not receive any compensation charge from the port. Yet, heavy vehicles with capacities of 40 to 50 tonnes use City Corporation roads every day, forcing us to spend Tk400-500 crore annually on road maintenance," Shahadat said. "We are not seeking any additional benefit from the port; we are only claiming the legally due holding tax."

The dispute began after the CCC issued a notice on 22 April assessing the port's holding tax at Tk264.35 crore. The CPA filed an appeal on 28 April, which was heard on 3 May. 

Following the hearing, the tax assessment was finalised in the presence of the mayor, and the port authority was asked to pay the dues on 4 May.

Earlier, the CPA had sought guidance from the Ministry of Shipping on whether it was liable to pay the holding tax. The ministry replied that, under the Local Government (City Corporation) Act, 2009 and the Chattogram City Corporation (Taxation) Rules, 1986, the city corporation has the legal authority to assess holding tax and instructed the port authority to pay the tax accordingly.

The mayor expressed hope that the remaining 25% of the assessed tax would also be realised after completion of the legal process.

According to Chattogram City Corporation, the port's holding tax had initially been assessed at Tk160 crore during the 2016-17 reassessment but was later reduced to Tk45 crore annually. After taking office, Mayor Shahadat initiated a fresh reassessment, which resulted in the latest valuation.

The mayor also said various government ministries and agencies owe the city corporation Tk197.53 crore in holding tax, including Tk154.68 crore in arrears from previous years and Tk42.84 crore for the current fiscal year. Demand letters have already been sent to the institutions, urging them to clear their outstanding dues promptly.