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Does the news indicate a favorable economic growth in the country? The issue might be resolved by calculating the speed of change in VAT payment and tax payment for each interval. If we examine a financial statement, we discover tax as a function of gain. As profit is the distinction between expenses and income, change can be a function of change in income or expenses. Mathematically we could express this notion as: Gain = Income - Expenses Tax = Profit * Tax rate If we consider two successive years' tax amount and Tax2, Percent change in tax amount, (Tax2 - Tax1) / Tax1 = (Profit2 - Profit1) / Profit1 * Tax rate = [(Income2 - Expenses2) - (Income1 - Expenses1)] / (Income1 - Expenses1) Consequently, tax growth rate could not be neutral if revenue could be raised or expenses could be reduced. Instead, tax growth rate can not become positive expenses increase or if revenue drops. 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Hence tax sum grew by 239.84% in the period of 2007-2008. But, what was the tax growth rate in the previous years? Table 1: Top 10 Corporate tax payers (Source: The Daily Star, July 10, 2008) Company name -Tax amount (In crore TK) - Change in tax payment 2007 -2008 - 2006-2007 2005-2006 - 2004-2005 - 2007-2008 - 2006-2007 - 2005-2006 Grameen Phone 435 128 28 6 239.84% 357.14% 366.67 %Standard Chartered Bank 220 188 86 41 17.02% 118.60% 109.76 %Ltd Chevron Bangladesh Blocks 14 and 13 180 81 11 - 122.22% 636.36% - Islami Bank Bangladesh Ltd 161 101 65 2 59.41% 55.38% 3150.00 % 136 97 70 - 40.21% 38.57% - HSBC 118 78 42 4 51.28% 85.71% 950.00 % 88 49 11 5 79.59% 345.45% 120.00 % 78 44 - 0.12 77.27% - - Citi Bank NA 76 52 28 14 46.15% 85.71% 100.00 %Prime Bank Ltd 67 47 26 - 42.55% 80.77% - In 2005-2006, Grameen's tax sum increased by 366.67%, while in 2006-2007, tax grew by 357.14%. Hence the growth rate has reduced annually. Most of other businesses had the same phenomena. Tax growth rate for Standard Chartered Bank for the past three intervals were 109.76%, 118.60% and 17.02%. Hence with this bank, the tax growth rate drastically dropped in 2007-2008. The exceptions of this list are Islami Bank Bangladesh Ltd and Titas Gas (T&D) Company Ltd. Titas Gas had 38.57% tax increase in 2006 2007, while the growth rate was 40.21% in 2007 2008. On the other hand, the tax increase of Islami bank grown by more than 4% in 2007-2008. But in 2006-2007, their tax growth rate dropped dramatically. In this age, their tax increase was simply 55.38%, while in 2005-2006, their tax growth was 3150%. Nearly similar story is composed for the top VAT payers in '07-'08 term. Table 2: Top 10 VAT payers (Source: The Daily Star, July 10, 2008) VAT amount (In crore TK) - Change in VAT payment 2007 -2008 - 2006-2007 2005-2006 - 2004-2005 - 2007-2008 - 2006-2007 - 2005-2006 British American Tobacco 2828 2481 2079 1852 Grameen Phone 1438 918 985 345 56.64% -6.80% 185.51 %Dhaka Tobacco 1180 1029 962 712 14.67% 6.96% 35.11 %Titas Gas Field 764 835 819 789 -8.50% 1.95% 3.80 %Sheba Telecom 601 252 224 - 465 494 512 546 AKTEL 196 159 99 110 23.27% 60.61% -10.00 %Rural Electrification Board 105 18 24 - 101 125 138 170 Out of the ten, five firms had reduced growth in VAT payment in this interval compare to '06-. Three of these firms had negative increase in VAT payment for the year 2007-2008. Out of these ten businesses, Grameen Phone, Sheba Telecom and REB had very sudden growth in 2007-2008. Grameen had an escalation in their growth in VAT payment from -6.8% to 56.64%, while Sheba's growth rose from 12.5% to 138.49%. REB's VAT payment growth was more sudden. It improved type -25% to 483.33%. On the other hand, British American Tobacco Bangladesh, the best VAT payer in Bangladesh, had a VAT growth of 13.99% in 2007-2008. Their VAT increase was 19.34% in 2006-2007. It is also mentionable that Grameen had a VAT growth of 185.51% in 2005-2006, while the increase reduced to -6.80% in 2006-2007.

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