Tax authorities mull utility service cut to press private univs pay 15% tax
In two separate orders by the NBR in 2007 and 2010, the income tax payable on the income of private universities, private medical colleges, private dental colleges, private engineering colleges, and private colleges engaged in teaching was fixed at 15%
After freezing the bank accounts of some private universities, the tax authorities are now considering stricter measures, including disconnecting utility services, to collect a 15% tax from them.
"We collected Tk148 crore last week from the fixed deposits of three private universities, even though they didn't pay after their bank accounts were frozen," a senior tax official at the Income Tax Zone-11, which is dealing with these dues, told TBS, seeking anonymity.
The official also said, "Some university authorities still do not properly cooperate with us in collecting government dues. If this continues, the individuals responsible for the non-compliance will be held accountable, and we are considering discontinuing their utility services (gas and electricity connections), which is permitted under the existing tax laws."
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If any bank does not cooperate in collecting the dues, the bank's managing director or managers of the branch will also be held liable, he added.
In two separate orders by the NBR in 2007 and 2010, the income tax payable on the income of private universities, private medical colleges, private dental colleges, private engineering colleges, and private colleges engaged in teaching was fixed at 15%.
Subsequently, 46 writs were filed by various private universities. On 27 February of this year, the Appellate Division ruled that the private universities in the country must pay a 15% tax on their income.
After the verdict, on 4 March, the tax authorities instructed 44 universities to pay the tax amounting to Tk800 crore, but none responded positively, an official of the National Board of Revenue (NBR) said.
Eventually, the tax authorities instructed the banks to freeze more than 28 accounts, he said.
According to Tax Zone-11 officials, as of Thursday, the tax authorities collected approximately Tk170 crore from more than 10 universities, fully or partially.
However, some universities are still unwilling to pay the amount, the said.
Belal Ahmed, director of the Association of Private Universities of Bangladesh, told TBS, "We requested the NBR to allow payment in instalments, but the tax authorities did not grant this facility."
If the situation continues, most of the private universities will become financially distressed and will not be able to continue their operations, he added.
A senior tax official of Tax Zone-11 told TBS, "If any university comes to us with a portion of the dues and appeals for an instalment plan, we will consider it positively."
According to the Association of Private Universities of Bangladesh, there are over 100 private universities in the country.
