BACKGROUND: In Bangladesh, approximately 20 million people use Zarda. Despite its widespread use, the government doesn’t focus on monitoring Zarda companies due to its low contribution to national revenue. This lack of oversight has enabled Zarda companies to increasingly evade taxes and violate legal regulations. This study examines and assesses the efficacy of government actions against Zarda companies involved in illegal operations and tax evasion.
METHODS: A thorough examination of secondary data gathered from 50 national and local newspapers, online platforms, and news outlets was performed from 2017 to 2023, concentrating on activities undertaken by different governmental agencies, such as the Customs, Excise, and VAT Commission, National Board of Revenue (NBR), the Bangladesh Police, and the Directorate of National Consumer Rights Protection (DNCRP).
RESULTS: The analysis unveiled multiple government efforts aimed at addressing Zarda tax evasion. The study identified 2 initiatives by Customs, Excise, and VAT Commission. One by NBR, 3 by DNCRP, and 3 by Bangladesh Police (Local Thana). Additional actions by the Dhaka South City Corporation and an Upazila Nirbahi Officer. Key findings include significant revenue evasion by prominent Zarda companies and the discovery of several duplicate Zarda factories. Notable cases involved Jahangir Chemical Works, A Qadir Eagle Tobacco, and Shahzada Salim Products, among others, with evasion amounts ranging from BDT 1.15 million to BDT 5.0 million.
CONCLUSIONS: While some of the government's initiatives are impactful, they are infrequent and suffer from inconsistent application, resulting in persistent revenue deficits. NBR's limited proactive involvement raises serious concerns, and enforcement of tax laws across the country is still insufficient. NBR needs to strengthen its proactive strategies against tax evasion in the Zarda industry. A collaborative strategy that includes more rigorous enforcement from the Customs, Excise, and VAT departments is crucial. Such actions will not only boost government revenue but also safeguard public health.