Auditor general finds Robi didn't pay Tk365cr in taxes
In the audit report, the CAG said Robi Axiata Limited did not comply with Section 29 of the Income Tax Ordinance 1984 by excluding provisions against tax liability from its income, thereby showing lower income
The Comptroller and Auditor General (CAG) of Bangladesh has found that Robi Axiata Limited paid Tk365 crore less in taxes for 2019 by reporting lower income through deductions in unallowable costs that did not comply with the income tax law.
The country's supreme audit institution uncovered these mismatches while scrutinising the telecom operator's financial report for 2019 and its tax return as part of the audit of the National Board of Revenue's (NBR) large taxpayer unit (LTU) for the tax year 2020-21.
In the report, published on the CAG website on Tuesday, the LTU stated that it will take the necessary measures to recover the amount after examining the company's tax records.
Mohammed Shahedul Alam, chief corporate and regulatory officer of Robi, told The Business Standard, "We are not yet aware of the CAG findings."
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In the audit report, the CAG stated that after reviewing the company's tax return, computation of total income and tax liability, financial statements for 2019, and invoice report, Robi did not comply with Section 29 of the Income Tax Ordinance 1984 by excluding provisions against tax liability from its income, thereby showing lower income.
"Additionally, the company did not deduct 10% tax at source on dealers' commissions of Tk789 crore and 12% tax at source on expenses of Tk21 crore related to security and cleaning services, as required by the income tax ordinance," read the report.
But since there is no evidence of payment of source tax verified by the CAG, it must be added to the income as required by law, rather than deducted as expenditure.
According to the CAG, the company understated its income by Tk871 crore, resulting in a lower assessed income tax liability. The company claims an income tax of Tk150 crore has been determined.
The CAG's assessment indicates the company's total income tax liability is Tk516 crore. Consequently, Robi will need to pay the rest of Tk365 crore.
However, its audit report for 2019 stated that Robi paid Tk361.99 crore in income tax.
Robi's financial performance
The telecom operator's revenues jumped 16% year-on-year to Tk9,942 crore in 2023, marking the highest ever yearly turnover in its history.
Besides, its net profit stood at Tk321 crore last year, marking a 76% annual growth in net profit.
Meanwhile, Robi had paid a 10% cash dividend to its shareholders for 2023.
Earlier, it had paid a 7% cash dividend for 2022.
In the January-March quarter of this year, it reported a significant growth of 154%, reaching Tk106.65 crore.
According to the report, its revenue surged by 7% to Tk2,516 crore, compared to the first quarter of the previous year.
Robi's consolidated earnings per share (EPS) stood at Tk0.20, net asset value (NAV) per share at Tk12.96, and net operating cash flow per share at Tk1.74 at the end of March this year.
According to a press release, the telecom operator has 5.81 crore mobile subscribers, accounting for 30% of the total as of March.
Its share price closed at Tk24 each on Tuesday, down 0.83% from the previous session at the Dhaka Stock Exchange.
Robi commenced operations in 1997 as Telekom Malaysia International (Bangladesh) with the brand name "Aktel."
In 2010, it was rebranded as Robi, and the company changed its name to Robi Axiata Limited. The company later merged with Airtel.
The mobile network operator raised Tk523 crore from the stock market through an initial public offering in 2020.
Axiata Group Berhad owns 61.82% of Robi, Bharti Airtel of India owns 28.18%, and institutional investors and the general public hold the remaining 10% jointly.
