The Dhaka West VAT Commissionerate yesterday busted a fake cigarette factory in Tangail, according to a press statement.
A team of the field office of the National Board of Revenue (NBR) raided the factory, which was running operations using a signboard of a rice mill.
The team seized nearly three tonnes of processed tobacco, filters, two sets of machines and packets of cigarettes of a high-priced brand.
“After examination, it was found to be counterfeit,” the statement said.
The raid came amid complaints from manufacturers that a section of unscrupulous people were making counterfeit cigarettes, evading VAT and supplementary duty and affecting the business of registered manufacturers.
The NBR collects Tk 22,000 crore in revenues annually from the Tk 33,000-crore cigarette market in Bangladesh.
Bangladesh is the eighth largest cigarette market in the world, with volumes exceeding 86 billion units annually and growing by about 2 percent, according to industry operators.
The Dhaka West VAT Commissionerate said the fake factory did not have VAT registration and was making cigarettes of most of the brands of British American Tobacco, the market leader in Bangladesh.
Nobody was detained during the drive as all involved fled before the team reached the spot.
The VAT office said 20 lakh sticks of cigarette could be made every day using the machine that was seized from the factory. It estimated that Tk 51 crore in revenues could be evaded every month if a factory makes such a quantity of high-priced cigarettes.
A case has been filed against the factory under the VAT law, said the statement. Some 3.78 crore adults in Bangladesh consume tobacco and tobacco products, of which 1.58 crore smoke bidi and cigarettes.
Annually 126,000 people die of tobacco-related diseases and consumption of the health hazardous tobacco cost Tk 30,560 crore in 2017-18, according to Progga, an anti-tobacco campaigner.