Bangladesh’s NBR Adopts Strict Stance
By Sheikh Arif (Dhaka Bureau)
The National Board of Revenue (NBR) has initiated ultimate legal and administrative measures to recover long-overdue taxes and evaded revenue from ‘InterContinental Dhaka’, one of the premier five-star luxury hotels in the capital city of Bangladesh. Following over a decade of legal complexities and non-compliance with court orders, the Large Taxpayers Unit (LTU) of the NBR has decided to freeze the hotel’s bank accounts and cancel all remaining installment facilities.
According to relevant official sources, the dispute stems from allegations of evading Value Added Tax (VAT) and supplementary duties imposed on restaurant services between 2005 and 2009. After the NBR’s initial investigation unearthed evidence of revenue evasion amounting to approximately BDT 19 crore, the matter escalated to court. Following a prolonged legal battle, the country’s apex court ruled in favor of the NBR in 2022, directing the hotel authorities to clear all outstanding dues within 15 working days. However, even four years after the court verdict, the full outstanding amount has not been recovered. Currently, the net receivable of the revenue board from the institution stands at nearly BDT 11 crore.
Revenue officials have alleged that despite explicit directives from the court, the hotel management has shown extreme negligence and a lack of sincerity in clearing the dues. A senior NBR official stated, ‘We have repeatedly made it clear that there is no scope to waive this statutory state liability, and no institution in the country has the legal jurisdiction to exempt these arrears.’
Last month, as part of its revenue recovery drive, the NBR took stringent action by freezing the hotel’s bank accounts, which compelled the hotel management to instantly clear BDT 3 crore. Consequently, the authority granted permission to pay the remaining dues in three installments. However, the process stalled again starting from the very second installment. As a result, the NBR has canceled the previous installment facilities and decided to pursue final legal action.
Legal Implications under Bangladesh VAT Law:
Under the existing VAT laws of Bangladesh, if an institution remains a long-term tax defaulter, the revenue authority can take severe measures, including:
* Freezing the institution’s bank accounts entirely.
* Attachment and confiscation of movable and immovable properties.
* Disconnecting essential utility services such as gas, electricity, and water.
* Permanently blocking the company’s Business Identification Number (BIN) and VAT registration certificate.
Bangladesh Services Limited (BSL), the state-owned enterprise that operates the hotel, declined to comment on camera. However, in a written statement, they claimed that the delay was not due to intentional negligence but rather stemmed from a deep financial crisis. They have been unable to clear the dues on time due to a severe liquidity crisis triggered by the hotel’s prolonged closure for extensive renovations, followed by domestic and global economic recessions. Notably, this historic property was reopened in late 2018 after extensive refurbishment.
According to international economic analysts, this serves as a symbolic case in preventing tax evasion by large and multinational corporate entities in developing nations. In the current global economic climate, the Government of Bangladesh is under immense pressure to enhance domestic revenue collection and maintain macroeconomic stability. The NBR’s hardline stance against a high-profile state and international brand like Hotel InterContinental demonstrates that the country’s revenue administration is now adopting a ‘Zero-Tolerance’ policy in enforcing tax laws and ensuring the accountability of large corporate entities.
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The Writer:
Sheikh Arif: Senior journalist and Panel Editor, Pressenza- Dhaka Bureau.
