British American Tobacco (BAT) Bangladesh has allegedly evaded Tk 3.79 billion in taxes and duties over four fiscal years by selling cigarettes at prices higher than those fixed by the government. The Large Taxpayers Unit (LTU) of the National Board of Revenue (NBR) issued a show-cause notice to the company over the alleged evasion, and the dispute later went to the VAT Appellate Tribunal. Recently my colleague Moinul Hasan Khan. Produced this excellent story at Ekattor Television.

Last month, the tribunal ruled in favour of the NBR, prompting the company to file a writ petition with the High Court challenging the verdict. Experts have called for the speedy resolution of such revenue-related cases.

BAT Bangladesh, a multinational company that has operated in the country for more than a century, contributes around 10 percent of the NBR’s total revenue. However, the company has repeatedly faced allegations of tax and duty evasion.

According to a report by the LTU, the company allegedly evaded Tk 3.79 billion in taxes and duties over four fiscal years by selling cigarettes at higher than government-fixed prices following budget announcements.

The LTU subsequently issued a final demand notice directing the company to pay the outstanding amount. Instead of paying, BAT Bangladesh filed a case with the VAT Appellate Tribunal.

After lengthy hearings, the tribunal ruled in favor of the NBR last month. Following the verdict, the LTU issued a notice asking the company to pay the amount within seven days. However, BAT Bangladesh has challenged the tribunal’s decision by filing a writ petition with the High Court.

Under NBR regulations, value-added tax (VAT) and supplementary duty must be paid on the basis of the maximum retail price when cigarettes are supplied from the manufacturing premises. Selling cigarettes at prices higher than the government-fixed rates is also prohibited.

Available information indicates that BAT Bangladesh allegedly evaded Tk 660 million in taxes and duties in fiscal 2020-21, Tk 560 million in 2021-22, Tk 880 million in 2022-23 and Tk 1.69 billion in 2024-25 by selling cigarettes at higher prices.

Tax analyst Snehashish Barua said the legal process needs to be reformed to prevent companies from exploiting loopholes in the law.

“If there are no loopholes in the law, even if someone files a writ petition, the honorable judges will uphold the law. Therefore, I believe the entire process needs to be overhauled so that laws containing such loopholes are not enacted and no taxpayer, whether a local or multinational company, can benefit from them,” he said.

Former NBR member Dr Abdur Rouf said authorities should consider alternative dispute resolution mechanisms to settle such cases quickly, provided the allegations are substantiated.

“If the order is correct and tax evasion has taken place, authorities should consider resolving the matter through alternative dispute resolution or another mechanism instead of allowing the process to drag on for years. I have reviewed many cases and found that disputes can often be resolved if both parties show some flexibility,” he said.

In the last fiscal year, BAT Bangladesh paid more than Tk 390 billion in revenue to the government.

Reporter: Moinul Hasan Khan, Ekattor Television, Dhaka. news link;