Star (October 26, 2010)
The Income Tax Department requested the Civil Aviation Authority of Bangladesh (CAAB) to suspend United Airways' flight permission for its failure to pay the government travel taxes.
Income Tax Zone One wrote the letter to the chairman of CAAB last week, seeking the agency's help in realising Tk 2 crore in pending taxes.
"To date, we have issued four letters, along with one final warning letter, to United Airways. But the company did not respond to any. We are compelled to take the legal step for their tendency to avoid paying taxes," said MA Kader Sarker, income tax commissioner.
The company has been realising the travel taxes from passengers, but not paying the government its dues since May.
United Airways Deputy Manager (marketing and communication) Md Kamrul Islam said the company has been operating smoothly for the last two years, paying all the taxes. "There might have been some lapses in payment lately, but we will soon pay the pending money."
Best Airways, another private airline, defaulted on payments worth Tk 2 crore in travel taxes and suspended operations.
Sarker said the tax office will adopt steps to realise the pending tax money from other airlines.
"United Airways happens to be the biggest defaulter. We will follow the same procedure for the other airlines, if they fail to pay up government dues regularly."
The National Board of Revenue (NBR) collected Tk 99.45 crore in travel taxes in the three months to September, up from Tk 91 crore in the same period last year.
The government is planning to make some changes in the travel tax law, so that NBR can directly take legal action against defaulters.
"We are planning to streamline the existing travel tax law, to ensure that every private airline is bound to pay government travel taxes, immediately after it is realised from the passengers," said an NBR member.
NBR is thinking about transferring the responsibility of collecting the travel tax to the civil aviation department instead of the airline operators from next fiscal year.
According to the travel tax law 2003, all airline operators must deposit the travel taxes collected against each ticket every month along with the number of travellers. The NBR can impose a penalty of 2 percent every month for any delay in depositing the taxes.
The law empowers the revenue board to freeze the bank accounts of the airline operators and suspend their flight permission through CAAB.
NBR failed to achieve its target of travel tax collection last year. It set a target to collect Tk 469 crore in travel taxes this fiscal year.
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