SEVERAL right groups protested the ‘Tax Evasion by Multinational Companies’ (MNCs) as the New Nation reports on Sunday said. They urged the government to take appropriate regulatory measures to curb tax dodging and illegal capital flight and demanded comprehensive audits of foreign companies by the Comptroller of the Auditor General’s office to end the practice. Speakers said most multinational companies are getting away with transfer of funds due to lack of monitoring capacity of National Board of Revenue (NBR) and proper auditing practice.
The Right Groups concern emerged at a press conference at the National Press Club although belatedly but it is highly sensitive to the national interest. They said a total of $402 million in tax payments was evaded by four major mobile phone companies in Bangladesh namely GrameenPhone (Telenor), Banglalink (Orascom), Robi (Singtel) and Airtel. They made the disclosure that the 3G internet auction which was held in recent past and in which these companies participated exhibited behaviour typical to that of oligopolistic firms which operate through tacit collusion; also no new participant from the global market was allowed to enter into the bidding. In doing so they deprived Bangladesh from getting competitive prices for the 3G spectrum. They said in India the 3G auction took 33 days and the government earned $11 billion exceeding the expectation of only $7 billion. Whereas in Bangladesh, the auction ended within less than an hour, which was apparently a predetermined game and the government sold the license at only $515 million, much less than the initial estimate of $800 million.
Citing a study of the Tax Justice Network, a UK-based advocacy group, a presentation made by EquityBD, a civil society organization which organized the press conference said Bangladesh lost around Tk 197,600 crore between 1976 and 2010 due to illicit capital flight. The MNCs are allegedly tricking the National Board of Revenue (NBR) and taking different strategies to evade tax. For example, the British American Tobacco Company alone has evaded payment of around $250 million. It is also alleged that the MNCs are at the forefronts of money laundering. A Washington based research institute said around $14 billion capital flight from Bangladesh took place from 2001 to 2011, mostly through L/cs and transfer pricing. By any consideration this is an extraordinary figure for a country like Bangladesh.
We share their concern and equally believe that it is the responsibility of the Comptroller and Auditor General office to immediately start the audit of those companies to bring things in order. Moreover the NBR should take steps to halt the capital flight as Bangladesh lacks budgetary funds for implementation of the Annual Development Programme (ADP) and borrowing from donors. It is a dire necessity to strengthen and galvanize NBR’s capacity to deal with tax frauds by shrewd merchants like the MNCs. Moreover, people should have the right to know about MNCs’ and they have built the transfer mechanism to channel money to their host countries. The issue should have a global angle to stop money laundering and the government should raise the issue at the G20 level meetings as they have suggested. Governments should also start an initiative for working out tax transparency agreements with trade partners with those countries where the MNCs’ have their headquarters. We can’t let the national resources be swindled unabated.
