NBR raid on cigarette company reveals Tk 90mn revenue evasion

The firm secretly produced and marketed cigarettes, evading revenue despite VAT registration, NBR says

The National Board of Revenue (NBR) has conducted a special raid at United Tobacco Industries Limited in Ishwardi, Pabna, and found evidence of revenue evasion of about Tk 90 million.

In a media statement on Thursday, the tax collection agency said it has recently strengthened activities to prevent illegal production, marketing, and revenue evasion of tobacco and tobacco products.

“In continuation of this, based on confidential information, a team from the NBR’s VAT Audit, Intelligence and Investigation Directorate conducted a special raid at the factory of United Tobacco Industries Limited in Ishwardi.

“The intelligence team’s observation shows the company has been evading a huge amount of revenue, despite receiving VAT registration, by secretly producing and marketing cigarettes without showing formal production activities for a long time,” the statement added.

“During the operation, 634,590 cigarettes with fake banderoles were seized, with a market value of more than Tk 3.8 million.

“Clear evidence was found that nearly Tk 2.9 million in government revenue had been evaded through these cigarettes.”

In addition, 1,029,000 unused fake banderoles/stamps were recovered, the NBR claimed, saying: “If used, these could have resulted in evasion of over Tk 85 million in revenue.

“The establishment collected 322,500 pieces of legitimate banderoles, but instead of using them, it was producing and selling cigarettes using fake banderoles.”

The NBR said all seized cigarettes and materials have been “legally confiscated” and “necessary legal proceedings have already been initiated against the establishment,” adding that a full report will soon be submitted based on the recovered documents.

Additionally, the relevant VAT Commissionerate will be instructed to closely monitor the establishment’s production and sales activities.