Faster, hassle-free: Alternative Dispute Resolution picks up steam

Two decades ago, the National Board of Revenue (NBR) issued a notice to Grameenphone saying that the Tk3.48 crore it had collected as rebate was outside any regulation.

In response, the telecommunication company filed a petition with the High Court in 2008 challenging the notice. The case could not be settled by the HC in the next 10 years, while Grameenphone continued to bear the expenses of the legal fees and the additional manpower it recruited to supervise the proceedings of the case.

The government, too, was negatively impacted as it could not collect the money on time.

In the last financial year, Grameenphone applied for settlement of the case under the Alternative Dispute Resolution (ADR) of the Large Taxpayers Unit (LTU) with permission from the HC.

Within 15 days the case was settled and Grameenphone paid the Tk3.8cr to the NBR.

This was not the first or only case that Grameenphone settled under the ADR.

Overall, the company has settled 15 cases in just one-and-a-half years, with the LTU VAT authorities even rewarding Grameenphone for solving the highest number of cases through ADR.

In the current 2021-2022 financial year, Grameenphone has settled nine cases under LTU (VAT) ADR only. In five of those, the company had to pay no money as the allegations were not substantiated.

"We are honoured and humbled to be awarded for resolving the highest number of cases through Alternative Dispute Resolution in this fiscal year, and we will continue to resolve the remaining issues together as one team," said Jens Becker, chief financial officer of Grameenphone.

According to the NBR, the number of cases in three areas -- income tax, VAT and customs -- is about 32,000, including ones with the NBR's appellate tribunal and the HC, with the estimated revenue to be made from those standing at Tk49,000cr.

To overcome the situation, the NBR introduced the ADR system in 2012, forming an ADR cell the next year.

There is a provision to settle any case under ADR within 60 days. However, the system has been slow to generate momentum.

Apart from Grameenphone, Banglalink and British American Tobacco (BAT) Bangladesh Limited have also settled cases under the LTU (VAT) ADR in the current financial year.

The revenue involved in the four cases of Banglalink was Tk34.54cr. The country's second largest mobile phone operator was also cleared of four cases under the ADR.

Banglalink is bringing eight more cases that are pending with the HC for disposal under the LTU-VAT ADR this month, a source said, adding that Islami Bank Bangladesh Limited would also bring five cases.

Arafat Huda Jaigirdar, senior manager, Fiscal Affairs, BAT Bangladesh, told The Business Standard that the ADR was benefiting both taxpayers and the administration. It was bringing quick results, thereby ensuring the government was getting its rightful revenue and taxpayers were not getting harassed.

"Taxpayers now have a very good working relationship with the LTU administration," he added.

Not only LTU (VAT) but also LTU (tax) authorities are showing success in settling cases under the ADR. A total of 13 cases have been settled in the current financial year under the LTU (Tax) ADR.

In the last financial year, 17 cases came to the LTU (tax) authorities for disposal through ADR. Of these, 14 cases were settled, generating over Tk21cr in taxes. Three cases were not resolved due to disagreements.

Masood Sadiq, a member of NBR, told TBS, "The NBR is encouraging ADR to resolve revenue disputes. As a result, the government is getting the revenue it deserves… businessmen and taxpayers are getting relief from harassment," he said.

"We hope that in the future, the ADR process will lead to solving more business disputes and speed up revenue collection."

The NBR has also formed a facilitator team consisting of experts for dispute resolution in the ADR system. The decision of the facilitator is taken after the arguments raised by the representatives of the company and the representatives of the concerned office of the NBR. There is an opportunity for any party to object to the facilitator's decision.

If the dispute is not settled, it goes to the court or the NBR's appellate tribunal for settlement as usual. If the dispute continues, then redress can be sought in the HC.

Ali Ahmed, a former member of the NBR, who is currently on the ADR facilitator panel, told TBS, "Currently, a number of companies are coming forward to resolve disputes in this process, which is positive. In this case, some offices [commissionerate] are also coming forward showing courage."