Business Desk :
The National Board of Revenue (NBR) in principle on 10th November in its board meeting decided to give 15 years tax holidays to Orion Group.
Question however arises as to why and on which ground the said company would get the privilege.
Orion Infrastructure Limited, a concern of Orion Group, has got tax holiday for 15 years on its income from Mayor Hanif Flyover, also known as Jatrabari-Gulistan flyover.
A member of the board 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 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 Nation.
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 tax exemption in full on income from the project through toll collection for 15 years arguing that the Local Government, Rural Development and Cooperatives Ministry had agreed the deal between the company and the Dhaka City Corporation to arrange tax exemption for the project.
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.
When asked under which ground Orion Group got tax exemption additional 5 years? An NBR Member (Tax appeal and exemption) told the Daily New Nation, “This is sensitive matter. I am unable to answer this question. Please do not ask any more.”
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 tolls higher than the contract rate. A writ petition was filed against the group for collecting the illegal tolls and High Court issued a rule upon the government to explain in one week “why the government should not be directed to stop the collection of toll at the increased rate”.
It also ordered the government and the operator to submit before it documents related to the contract rate in seven days.
The National Board of Revenue (NBR) in principle on 10th November in its board meeting decided to give 15 years tax holidays to Orion Group.
Question however arises as to why and on which ground the said company would get the privilege.
Orion Infrastructure Limited, a concern of Orion Group, has got tax holiday for 15 years on its income from Mayor Hanif Flyover, also known as Jatrabari-Gulistan flyover.
A member of the board 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 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 Nation.
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 tax exemption in full on income from the project through toll collection for 15 years arguing that the Local Government, Rural Development and Cooperatives Ministry had agreed the deal between the company and the Dhaka City Corporation to arrange tax exemption for the project.
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.
When asked under which ground Orion Group got tax exemption additional 5 years? An NBR Member (Tax appeal and exemption) told the Daily New Nation, “This is sensitive matter. I am unable to answer this question. Please do not ask any more.”
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 tolls higher than the contract rate. A writ petition was filed against the group for collecting the illegal tolls and High Court issued a rule upon the government to explain in one week “why the government should not be directed to stop the collection of toll at the increased rate”.
It also ordered the government and the operator to submit before it documents related to the contract rate in seven days.
