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Tag: tax evasion

  • Bangladesh Officials Meet to Stop Tobacco Use, Tax Evasion 

    Bangladesh Officials Meet to Stop Tobacco Use, Tax Evasion 

    Yesterday (March 18), National Board of Revenue (NBR) chairman Md Abdur Rahman Khan said Bangladesh was considering the introduction of a QR code system band-roll for the tobacco sector to prevent tax evasion. Speaking at a pre-budget meeting with the Anti-Tobacco Media Alliance (ATMA), he said that high taxes on tobacco products have created a huge amount of illicit cigarettes entering the country, thus depriving the NBR of due revenue.

    The chairman said some bidi companies use counterfeit band-rolls to avoid paying taxes in the national exchequer.

    “Even they bring those band-rolls from abroad after printing in there,” he said. The NBR chairman put emphasis on establishing a cashless society to stop tax evasion.

    The ATMA argued cigarette prices in the country were too low, and that having a four-tier price system (low, medium, high, and premium) has rendered the tobacco price and tax measures less effective. It proposed merging the low and medium categories.

  • Report: BAT Kenya Has $28 Million Tax Discrepancy

    Report: BAT Kenya Has $28 Million Tax Discrepancy

    Members of the Tobacco Control Research Group (TCRG) and The Investigative Desk claim to have found a $93 million discrepancy in revenue reported by British American Tobacco Kenya for 2017 and 2018, which would result in $28 million in missing tax revenue for the country. According to the report published by the University of Bath’s TCRG, government documents and data on cigarette consumption and prices found numerous contradictions, including “millions of cigarette packs unaccounted for, leading to [missing] revenues and therefore tax that would normally be expected.”

    “In the absence of a convincing explanation, this looks like tax avoidance and potentially evasion,” Leopoldo Parada, Reader in Tax Law at King’s College London, said.

    “BAT Kenya firmly rejects all the allegations made regarding the discrepancy between its published financial disclosures and data,” a spokesperson for the company said in a statement. “The company pays all taxes in line with applicable laws.”

    The report authors have asked the Kenya Revenue Authority (KRA) if they will investigate, but have not yet received a response.

  • Korea: Vape Firms Evading Taxes

    Korea: Vape Firms Evading Taxes

    Image: Andrii Yalanskyi

    E-cigarette companies have been evading taxes by declaring false nicotine content when importing liquid nicotine base into South Korea, according to one of the country’s lawmakers, reports The Pulse.

    The accumulated tax evasion is estimated at several trillion won.

    Between January 2020 and July 2023, 20,197 kg of liquid nicotine base was imported, according to documents from the Korea Electronic Liquid Association obtained by Lim Lee-ja of the ruling People Power Party. Approximately 3,300 bottles of e-liquid can be produced with 1 kg of liquid nicotine. Each bottle is levied at KRW53,970 ($40.60).

    Many e-cigarette companies have been mis-declaring tobacco leaf nicotine as tobacco stem and root nicotine to evade taxes since 2016, according to the association. Under Korea’s tobacco laws, nicotine extracted from tobacco stems and roots is not classified as tobacco.

    Data shows that e-cigarette companies changed their declarations from tobacco leaf nicotine to synthetic nicotine when Korea’s Individual Consumption Tax Act was amended in 2021 to impose taxes on all tobacco-derived nicotine. Synthetic nicotine is classified as a simple commodity and not subject to taxes.

    The association stated that annual distribution volume of Korean e-cigarette liquid is 30 million 30 mL bottles, with an estimated annual tax evasion of KRW1.6 trillion.

    In 2019, the Board of Audit and Inspection audited the Korea Customs Service, the Ministry of Environment and the Ministry of Health and Welfare, showing that all the inspected imported nicotine was tobacco leaf nicotine. Falsified declarations have continued since then, according to the association.

    Lim has called on the government to crack down on companies falsely declaring their products.

    Liquid nicotine base is considered a hazardous substance under the Chemical Substance Control Act, regulated by the Ministry of Environment. Imports must be reported to the minister of environment, and companies must obtain an import declaration certificate for hazardous substances.

    Those caught failing to report or falsely reporting the import of hazardous substances are subject to up to one year of imprisonment and up to KRW30 million in fines. None of the companies shown to have falsely declared nicotine products in past audits have been punished to date.