Summit Group faces allegations of Tk 1,112 crore in tax evasion

Summit Group Accused of Tk 1,112 Crore Tax Evasion; Denies Allegations

The National Board of Revenue (NBR) has accused two entities under Summit Group of failing to deduct taxes at source on dividend payments, resulting in approximately Tk 1,112 crore in unpaid taxes. Summit Corporation Limited, a major Bangladeshi conglomerate, is alleged to have not deducted the mandatory 15% tax at source when distributing dividends to Summit Power International, its Singapore-based parent company. Similarly, Summit Power Limited reportedly did not withhold the required tax on dividends paid to Summit Corporation Limited, its majority shareholder.

Allegations and Findings
The Central Intelligence Cell (CIC) of the NBR conducted a detailed investigation into Summit Group’s tax practices as part of a broader probe into leading industrial conglomerates, including Bashundhara Group, Beximco, Nassa Group, Orion Group, S Alam Group, and Third Wave Technologies (Nagad). The investigations were initiated following the installation of an interim government in August.

According to CIC officials, Summit Power Limited, which has a paid-up capital of Tk 1,067 crore, failed to deduct Tk 318.34 crore in taxes on dividends paid to Summit Corporation Limited between FY2018 and FY2024. Including penalties, the unpaid amount rose to Tk 465.07 crore. Similarly, Summit Corporation is accused of not deducting Tk 437.65 crore in taxes on dividends paid to its primary shareholder, Summit Power International. With penalties, this figure reached Tk 647.73 crore.

Under Section 117 of the Income Tax Act, Bangladeshi companies are required to deduct taxes at source on dividend payments. However, investigators claim Summit Group did not fulfill this obligation for dividends paid within the group.

Summit Group's Response
Summit Group has denied the allegations, asserting its adherence to legal and tax compliance. In a statement, the company said:
“We have yet to receive any information from NBR or tax authorities. Summit has never evaded any tax. Upon receipt of any letter from NBR or tax authorities, we will do whatever is required as per the laws of Bangladesh. We have always abided by the laws and will continue to do so.”

The company also pointed to what it called a "wrong clarification" from the NBR in 2023, which guided its actions. “The question of evasion does not arise as we acted on NBR’s clarification,” the statement added.

Next Steps
The case has been referred to Tax Zone-2 for further action. Letters detailing the CIC's findings have already been sent to Summit Group. “This is one of the largest tax deduction at source (TDS) cases we’ve encountered,” a CIC official stated.

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