The National Board of Revenue’s (NBR) Central Intelligence Cell (CIC) has uncovered a potential scheme involving the import of cellulose acetate tow, a key raw material used in cigarette filter production, in the name of non-existent companies, raising concerns over large-scale revenue evasion through possible illegal sales or transfers.
Following a risk-based investigation and intervention by the CIC, the clearance of a consignment at Chattogram Customs House was suspended, ensuring the recovery of Tk 16.44 crore in import-stage revenue.
According to CIC sources, two containers carrying 48,143 kilograms of acetate tow were imported through Chattogram Customs House in the name of a company called ‘Unique Traders’, which has been identified as non-existent. The consignment was stopped after authorities found that the company had no actual business operation at its registered address. The consignment involved approximately Tk 16.44 crore in import-stage revenue, which has since been secured.
The CIC’s analysis found that acetate tow is an entirely import-dependent raw material. As imports of the product through commercial importers have increased significantly in recent times, the agency began examining its actual use, supply chain and end users. During the analysis, the imports made by Unique Traders drew particular attention.
The CIC sought information from the relevant VAT department to determine where the company’s imported products were being supplied. In response, the VAT authorities reported that the company was not conducting any business activities at its registered address. The company also failed to regularly submit VAT returns and other relevant documents either online or offline. Based on these findings, the company was identified as a non-existent entity.
Potential Revenue of Tk 324 Crore from a Single Consignment
The CIC’s preliminary assessment has also revealed a significant potential revenue risk associated with the domestic use of the imported acetate tow.
According to the agency, an analysis of VAT-related data from two established cigarette manufacturers showed that approximately 8,937 cigarettes can be produced from one kilogram of acetate tow.
Based on this calculation, the 48,143 kilograms of acetate tow in the consignment could be used to produce approximately 430.25 million cigarettes. Assuming 10 cigarettes per pack, the quantity could produce around 43.02 million packs of cigarettes.
For cigarettes in the mid-tier segment, the retail price per pack is Tk 92. Considering an applicable revenue rate of around 82 percent, including VAT and supplementary duty at the local production stage, the potential revenue associated with this quantity of cigarettes could be approximately Tk 324 crore, according to the CIC’s preliminary calculation.
For cigarettes in the premium segment, where the retail price is Tk 160 per pack, the potential revenue associated with the same quantity of raw material could rise to approximately Tk 564 crore, assuming the same 82 percent revenue rate.
The CIC, however, has indicated that these are preliminary estimates based on potential production and applicable revenue rates. The actual amount of revenue loss, if any, would require verification of the product’s actual use, production, sales and tax payments.
More Than 362,000 Kilograms Imported in One Fiscal Year
The CIC’s analysis further found that Unique Traders imported a total of 362,837 kilograms of acetate tow during the 2025–26 fiscal year, including the consignment currently under investigation.
Considering the estimated production capacity of approximately 8,937 cigarettes per kilogram of acetate tow, the large volume of imports has raised questions about the actual use of the raw material, its end users and the subsequent supply chain.
The CIC is now conducting further verification to determine the actual users of the imported acetate tow, its supply destinations and whether the products were subsequently sold or transferred.
Four More Non-Existent Companies Identified
During its analysis of acetate tow imports, the CIC also identified four more companies whose existence and business activities have come under scrutiny.
Information obtained from the relevant VAT departments indicates that these companies had no actual business operations at their registered addresses. They also failed to regularly submit VAT-related returns and other required documents to the authorities.
The CIC’s preliminary investigation suggests that some entities may have obtained nominal registrations to import acetate tow, a product associated with substantial revenue, and subsequently sold or transferred the imported goods illegally.
Such practices could potentially create significant revenue risks not only at the import stage but also at the domestic production stage.
The authorities are currently examining the actual users of the imported acetate tow, its supply destinations, sales, financial transactions and the individuals and entities associated with the imports. Initiatives have also been taken to identify those involved and take action under the applicable laws.
Meanwhile, in response to the emerging concerns over the import and supply of high-revenue-sensitive acetate tow, the NBR has instructed the relevant VAT commissionerates to verify the supply chain of the product.
Revenue officials believe that, in addition to verifying the existence and genuine business activities of importers, tracking the actual users, supply destinations and subsequent sales or transfers of imported acetate tow could help identify and prevent similar revenue risks more effectively.