Summit Faces Record Tk 2,000cr Tax Claims

Tk 963 crore over dividend tax ⊕ Another Tk 1,020 crore found in records of three power plants ⊕ Summit denies allegations

Following the fall of the Awami League government, allegations of record tax evasion have surfaced against Summit Group, one of Bangladesh’s most influential business conglomerates.

The National Board of Revenue (NBR) has reportedly found evidence of nearly Tk 2,000 crore in alleged income tax evasion involving several companies and power plants of the group over the past several years, according to sources familiar with the matter.

Of the amount, around Tk 963 crore allegedly relates to withholding tax on dividends paid to Summit Corporation through various subsidiaries of Summit Power. Subsequently, after opening and examining records under Section 212 of the Income Tax Act, the NBR identified another Tk 1,020 crore in alleged tax evasion involving three power plants of the group.

Summit Group, however, has denied the allegations, saying it has paid all applicable taxes in accordance with the law and regulations.

Tk 963cr Dividend Tax Dispute

Summit Corporation owns around 63 percent of Summit Power Limited, a company listed on the stock market.

According to the NBR, several subsidiaries of Summit Power did not deduct the applicable 20 percent withholding tax when paying dividends to Summit Corporation. As a result, the government allegedly lost around Tk 963 crore in tax revenue.

Former NBR member Khairul Islam said the law requires a company paying dividends to another company to deduct tax at the prescribed rate.

“Summit Power pays dividends to Summit Corporation. The law provides for tax deduction at the prescribed rate when one company pays dividends to another. Therefore, the NBR has a legal basis to take action in this matter,” he said.

He also noted that a taxpayer has the right to challenge an assessment before the High Court.

Large tax claims against seven entities

According to NBR calculations, substantial tax claims have been raised against several Summit entities and power plants for different periods. The claims include:

• Summit Power Limited: Tk 388 crore over seven years

• Summit Gazipur-2: Tk 176 crore over three years

• Summit Barishal Power: Tk 56 crore over four years

• Summit Meghnaghat: Tk 93 crore over six years

• Summit Narayanganj Unit-2: Tk 20 crore over three years

• Summit LNG Terminal: Tk 100 crore over three years

• Summit Bibiyana Power: Tk 130 crore over six years

Summit Group has challenged the NBR’s claims before the High Court. The cases are currently pending.

Deputy Attorney General Barrister Tanim Khan said the cases involving Summit Group are pending before the High Court and are being taken up for hearing as they appear on the court’s cause list.

Tk 1,020cr More Tax Claims Surface

After identifying the alleged tax irregularities involving dividend income, the NBR began examining the records of Summit Power’s subsidiaries under Section 212 of the Income Tax Act.

So far, the tax authority has reportedly found another Tk 1,020 crore in alleged tax irregularities involving three companies.

According to the records reviewed by the NBR, the alleged irregularities include concealment of income and other discrepancies. The claims are:

• Summit Meghnaghat Power Limited: Tk 760 crore over four years

• Summit Bibiyana Power Limited: Tk 252 crore over five years

• Summit Barishal Power Limited: Around Tk 7.5 crore over nine years

Summit has also challenged these claims before the High Court.

Summit: A Power Sector Giant

Summit Group is one of the major private-sector power producers in Bangladesh. Its power plants reportedly account for around 20 percent of privately generated electricity in the country.

The group has long been regarded as one of the most influential business conglomerates in Bangladesh’s power and energy sector. During the Awami League government’s tenure, its rapid business expansion and various public-private agreements attracted considerable attention.

Following the change in government, however, several government agencies have increased scrutiny of the group’s business activities.

Summit denies allegations

When contacted about the tax evasion allegations, Summit Group denied the claims in a written response.

The group said it had complied with all applicable laws and regulations and had paid its taxes accordingly.

This has created a clear disagreement between the NBR’s assessment and Summit’s position. The final outcome will depend on the decisions of the High Court in the pending cases as well as the findings of the NBR’s ongoing investigations.

More Summit Firms Under Tax Probe

Meanwhile, the NBR is reportedly investigating the tax affairs of several other companies within the Summit Group.

As a result, questions remain over whether the amount of alleged tax liabilities could increase as the investigations progress.

Given the scale of the claims, tax experts and governance advocates say the matter requires transparent investigation, independent verification of financial records and protection of the public revenue.

At the same time, as the disputes are before the courts, the allegations should not be treated as established wrongdoing until the relevant legal proceedings are concluded. The final determination of the tax liabilities will ultimately depend on the evidence, applicable tax laws and judicial decisions.