VAT Intelligence seized nearly two lakh illegally manufactured cigarettes during a raid in Gazipur's Koultia Monday.

The cigarettes were manufactured using fake tax stamps or band rolls, depriving the government of huge money, said the VAT Audit, Intelligence and Investigation Directorate officials after raiding Virgo Tobacco.

Moinul Khan, VAT Intelligence director-general, said the factory had been manufacturing illegal cigarettes and evading tax for a long time.  

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"On information, the VAT intelligence team raided the factory today and seized 199,000 sticks of cigarettes with fake band rolls. The illegally manufactured cigarettes were being sold to remote parts of Sylhet, Barishal and Cumilla," said Moinul.

VAT Intelligence Deputy Director Tanvir Ahmed, who led the raid, said: "The factory was being operated in two shifts. During night shifts, illegal cigarettes were being manufactured. The government would suffer a revenue loss of Tk40 lakh if the seized cigarettes were sold to markets."

The National Board of Revenue sources said 73% value added tax (VAT) and supplementary duty (SD) are imposed on cigarettes of the lower tier.

The industry insiders said most companies are violating the law and evading taxes while manufacturing low tier cigarettes.

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VAT Intelligence officials said local markets are now being flooded with cigarettes of different illegal brands. Remote and underdeveloped regions are the biggest market for locally produced illegal cigarettes.