‘Non-existent’ firm’s imports put Tk 2,450 crore revenue at risk

The National Board of Revenue's (NBR) intelligence wing has detected the possible import and illicit marketing of around 363 tonnes of cigarette filter-making raw materials in the name of a non-existent trading firm, potentially putting around Tk 2,450 crore in government revenue at risk.

The Central Intelligence Cell (CIC) of the NBR has also found information on imports of cigarette raw materials in the names of four other non-existent firms.

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Officials said letters have been sent to the respective banks seeking details of their import transactions and bank accounts.

Recently, the CIC seized a consignment of 48 tonnes of acetate tow, a raw material used in making cigarette filters, which was awaiting clearance at Chattogram’s custom house.

The consignment was imported by Unique Traders of Motijheel on August 18. However, customs officials found that the firm did not exist at its stated address during a field inspection.

The clearing and forwarding agent, Faiz Trading Company Ltd, has ensured payment of Tk 16.44 crore in import-stage duties and taxes for clearance of the consignment.

According to a CIC calculation, the same raw material could have generated around Tk 324 crore in revenue if it had been used to manufacture cigarettes locally.

Import documents show that Unique Traders imported a total of 363 tonnes of cigarette raw materials during the 2025-26 fiscal year. The CIC is now investigating the actual use of the materials and their supply chain.

“Under the gazette issued on August 24, no trading firm is allowed to import cigarette raw materials. As Unique Traders imported the consignment before the gazette was issued, it was technically eligible for clearance. But we seized it after receiving information about the firm and the consignment,” a CIC official told The Daily Star, requesting anonymity.

“As no importer came forward, the C&F agent contacted us and paid the applicable import-stage revenue,” the official said.

He said the firm has also been asked to provide details of where the 363 tonnes of raw materials cleared in the past were sold and pay VAT on those sales.

“Who used and is using these raw materials is now being investigated,” he added.

In a field inspection report submitted on August 19, Munawar Mursaleen, deputy director of the Customs, Excise and VAT Commissionerate, Motijheel, said that the firm did not exist at its stated address.

“Although the firm submitted returns for the last two tax periods, it did not show any sales in those returns,” he said in the report.

According to a CIC press release, valuation documents submitted by two cigarette manufacturers show that around 8,937 sticks of cigarettes can be produced from one kilogramme of acetate tow.

On that basis, the 48,143 kilogrammes of acetate tow in the seized consignment could produce around 43.02 crore sticks, or about 4.30 crore packets, assuming 10 sticks per packet.

The CIC said that if the cigarettes were from the medium segment, with a retail price of Tk 92 per packet and applicable VAT and supplementary duty accounting for around 82 percent of the retail price, the government could have collected around Tk 324 crore in revenue.

For high-segment cigarettes, assuming a retail price of Tk 160 per packet, the potential revenue would be around Tk 564 crore, it said.

Similar findings in earlier investigation

Importing cigarette raw materials in the names of non-existent firms to evade VAT and manufacture illicit cigarettes is not a new phenomenon.

On June 1, 2024, The Daily Star published an investigative report titled “Councillor's illegal cigarette trade” on the issue.

Following the report, an investigation committee was formed with Mohammad Fakhrul Alam, then director general of the Directorate of Customs Intelligence and Investigation, as its head.

The committee, comprising officials from Customs Intelligence and the CIC, submitted its report in December that year after several months of investigation.

The report found that a syndicate was importing cigarette raw materials in the names of at least 20 trading firms and using them to manufacture counterfeit cigarettes. Eleven of those firms were identified as non-existent.

The committee recommended banning imports of cigarette raw materials by all entities except VAT-registered cigarette and bidi manufacturers.

Although the government subsequently doubled the import duty on cigarette raw materials for trading firms, it failed to completely prevent such imports and the production of illicit cigarettes.

Finally, through a gazette issued on August 24 this year, the government restricted the import of cigarette raw materials to cigarette and bidi manufacturing companies only.