Mayor Hanif Flyover
Orion set to get tax exemption for 15yrs
The National Board of Revenue on Sunday decided in principle to provide Orion Infrastructure Limited, a concern of Orion Group, with tax exemption on its income from the Mayor Hanif Flyover for 15 years, officials said. They said that the decision was taken at the regular board meeting of the revenue board following a recent plea for the tax exemption from the company. The revenue board earlier in January drastically cut down the customs duty to around 50 per cent from the highest 350 per cent on the import of luxury cars for infrastructure projects which to be built on build-own-operate-transfer basis under the public private partnership mainly to please Orion Group as there is no such project except Hanif flyover in the country.
The revenue board decided to provide the tax benefit in line with the government’s agreement with the company to promote the construction of large infrastructure under the public private partnership scheme, a high official of the NBR, who attended the meeting, told New Age.
According to the existing provision of the NBR, the company will normally get tax waiver at gradually reduced rate for 10 years, he said.
But Orion sought full tax exemption on income from the project through toll collection for 15 years arguing that the local government, rural development and cooperatives ministry had agreed in the deal between the company and the Dhaka City Corporation to arrange tax exemption for the project.
On the other hand, the amount of revenue loss will not also be significantly high if the tax exemption is given to the project as the taxable income of the company will be insignificant after adjusting depreciation facility, interest on bank loan and other administrative cost of the project, the NBR official said.
Considering all the issues, the revenue board took the decision to promote such large infrastructure projects in the country, he added.
According to the Income Tax Ordinance-1984, the company will be allowed 2 per cent depreciation each year on its investment on the project and the amount of depreciation will be excluded from the taxable income of the company.
Orion invested around Tk 2,100 crore for the construction of the 10-kilometre Jatrabari-Gulistan flyover, named after former Dhaka mayor late Mohammad Hanif.
The project was initially estimated to cost Tk 610 crore but the cost was increased to around Tk 2,100 crore due to delay in completion of the project.
The flyover was constructed on build-own-operate-transfer basis and will be handed over to the Dhaka South City Corporation after 24 years, according to the agreement.
There are allegations that Orion collects exorbitant tolls from vehicles that keep the drivers away from using the infrastructure.
-With New Age input
