The National Board of Revenue has in principle decided that Civil Aviation Authority, Bangladesh will have to pay income tax as it is a taxable entity, officials of the NBR said.
The revenue board, at an inter-ministerial meeting held in February 19 at NBR conference room, made the decision rejecting a plea of CAAB seeking exemption from paying income tax, they said.
CAAB and the NBR have been in dispute over income tax for years as CAAB has not been paying the tax, claiming it as a non-taxable entity while the tax administration has been asking the Authority for opening tax file and paying tax.
Officials of the CAAB, however, said that, by this time, civil aviation and tourism minister Rashed Khan Menon has again requested finance minister Abul Maal Abdul Muhith to consider the CAAB as a non-taxable entity.
According to them, the CAAB is not a commercial enterprise and it was not established for making profit rather it is a regulatory body of aviation-related activities in the country.
The regulatory body demanded that the NBR should consider the organisation as a non-taxable entity and provide exemption from paying income tax, they said adding that according to Civil Aviation Ordinance-1985, the CAAB is exempted from paying income taxes.
A high NBR official told New Age on Monday that according to Finance Act-2011 the CAAB and other bodies established by laws are identified as tax payable enterprise.
‘The CAAB will have to pay income tax as per law. Some other organisations with same kind of characteristics like Chittagong Port Authority and Water Supply and Sewerage Authority are also paying income tax,’ he said.
Now, the revenue board may reduce the tax rate along with depreciation facility for the body, he said.
Officials of the NBR, however, said that the decision would be finalised at budget exercise for the next financial year 2014-2015 unless the finance minister gave any other directive.
Earlier, the CAAB, in a letter to the NBR, had said that the organisation provided aeronautical services and responsible for safe, expeditious and efficient flow of air traffic within the national airspace of the country.
It is also custodian of all airfields and air navigation facilities in the country, it had said.
The CAAB is also responsible for maintaining passenger services and facilities at the airports and ensuring security to passengers and to detect and prevent penetration of terrorist activists on board from within national territory, it had said.
All the activities mentioned above were done by own funds of the CAAB and it is important for the CAAB to remain financially solvent to keep the airports always ready for plying as part of conditions of the International Civil Aviation Organisation, the letter said.
-With New Age input