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.   READ: House approves bill to ban the sale of flavored e-cigarettes "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. READ: 150 cartons of contraband cigarettes seized at Sylhet airport 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.

Some 88 percent of shops still remain out of the Value Added Tax (VAT) net, according to a recent survey conducted by the VAT Intelligence and Investigation Directorate. Out of 1,024 shops at eight markets in Dhaka, Narayanganj and Savar, 904 shops don’t pay VAT as per the study findings. Three teams of the VAT Intelligence completed the survey on Thursday, said a release on Friday. Read NBR faces uphill task in achieving VAT collection target Among the 1024 shops, the number of VAT registered shops is only 120. Of the VAT registered shops, only 45 ones pay above Tk 5,000 as VAT, while the remaining 75 shops pay less than Tk 5,000. But the survey teams got evidence that evethe payments of the shoppers who deposit VAT mismatched with their operation costs and profit of the shops. In some cases, the shoppers collected VAT from buyers but didn’t pay to the government fund properly. Read Covid-19 impact: NBR devises ways to boost revenue collection The eight markets are Mark Tower, Somobay New Market, Sayeem Plaza, Al Hakim (Popular) Centre in Narayanganj; City Centre in Savar; and Tropical Alauddin Tower and RK Shopping Complex at Uttara and Suvastu Nazar Valley at Badda in Dhaka. But 500 shops at Suvastu Nazar Valley were mandatorily registered on Thursday. Deputy Director of the Intelligence Tanvir Ahmed led the survey in Narayanganj, while it’s Assistant Director Munwar Mursalin in Dhaka and assistant director Malekin Nasir Akand in Savar. A total of 42 intelligence officials took part in this work. Read How Covid has caused a dent in Bangladesh's coffers According to the survey report, shoppers outside Dhaka are more reluctant to pay VAT and less interested to follow the VAT laws. Conducting another survey in two AC markets –-Index Plaza and Jaman Shopping Complex-- in Narsingdi on May 25 last, it found that all the 237 shops in the two markets don’t pay VAT.