The Alternative Dispute Resolution (ADR), an initiative launched by the National Board of Revenue to resolve tax-related disputes, is gradually becoming popular among the businesses. Even though there was significant success in disposing of tax-related in the early years following the launching of ADR in 2012, the disposal rate of such cases grew exponentially in the last two financing years.
According to NBR data, a total of 345 tax-related cases were dismissed through ADR in the last two years from where the exchequer received Tk 2,412 crore and 63 lakhs. The success rate in the initial years was lower as the businesses were not interested in resolving their cases in this manner, tax officials claimed.
ADR is a system that refers to any means of settling disputes outside of the courtroom. ADR typically includes early neutral evaluation, negotiation, conciliation, mediation, and arbitration.
According to NBR sources, in fiscal years 2017-18 and 2018-19 a total of 345 cases were disposed of through ADR with four negotiators. Of them, former NBR member Tarik Haider completed disposal of a total of 139 cases, from which NBR could earn Tk 1,516 crore and 7 lakh. He took Tk 53 lakh as fee or charge for disposing of these cases. Besides, Aminul Karim, another former member of the revenue board disposed a bunch of cases from which NBR got its arrear amounting to Tk 149 crore and 88 lakh from the businesses.
Apart from this, auditor Humayun Kabir disposed of cases worth of Tk 714 crore and 97 lakh. And, Md Alauddin, also a former NBR member disposed of several cases worth of Tk 31 lakh. According to source, the NBR in 2018-19 financial year, targeted resolving 200 tax related cases involving Tk 1,602 crore through ADR while a total of 231 appeals were submitted by the businesses.
Of these, 124 cases were completely resolved while 18 cases were partially resolved and 41 cases still remain under trial. Besides, the board in the fiscal 2017-18 set a target to resolving 190 cases worth Tk 1,701 crore through this mean while 360 appeals of disposals were submitted by the businesses. Out of these cases, 121 cases were conclusively disposed of, 8 partially disposed of and 131 cases still remain under trial.
A senior tax official told Bangladesh Post that both the appeals of disposal and the revenue earnings were now on the rise through ADR move. In the ADR regulation it is said that any case will be resolved under the supervision of a non-court expert intermediary while representatives from both NBR and the case filer must present.
The intermediary will bring both the parties to negotiate their demands respectively and if the case is resolved both the parties (NBR and businesses) will have to equally pay a fee for the negotiator. Hafiz Ahmed Murshed, NBR member for Taxes Legal and Enforcement on Sunday told Bangladesh Post that they had taken several moves to encourage the businesses to resolve their tax-related cases through ADR as it could dispose of the cases within a shortest period.
Earlier, the businesses claimed that while disposing of cases through ADR, the NBR remains on a tough stance, dejecting the business community to undergo the system.
“There is no scope of manipulation here. The businesses enjoy ultimate freedom to place their arguments on ADR table that is why NBR could resolve more cases now than its target through the system,” Hafiz Ahmed Murshed said. “Only for the unwillingness of businesses the ADR system could not become popular at the beginning years,” he added.
There is an allegation that the nefarious businesses are unwilling to resolve their cases through ADR because they want to take the advantages of court’s lengthy legal process of disposing the cases. Sources said the businesses have huge arrears to the revenue board. Many of them are reluctant to pay their amount and that is why they file cases over the dispute to delay the payment, hampering the government’s earnings.