Jamuna Group, one of the largest Bangladeshi industrial conglomerates, owns companies across multiple sectors, most notably in consumer goods, engineering and media.
It has been called up by the governmental body for the alleged failure of one of its companies, Aromatic Cosmetics (now defunct) to pay the relevant taxes, amounting to about Tk 700 crore between 1996 and 2000.
Lost appeal
After a lengthy legal process which began in 2003, the court has now ruled against Jamuna Group at appeal, and the group must now pay the NBR the outstanding fees.
According to The Daily Star, NBR Chairman Md Nojibur Rahman said the NBR now puts more resources into proactive revenue collection than it has done previously, with the clamp down on Jamuna Group being an indication of this new approach.
“The realisation of VAT had remained pending for a long time. Since the judgment came in favour of the NBR, the money will have to be paid to the government,” the official explained.
Manufacturing hub
The case comes at a time when cosmetics and personal care manufacturers are expanding their operations in Bangladesh, in part to avoid the higher import tariffs for products made in India.
Companies like cosmetics firm Marico and personal care giant VLCC have established bases in the country, for example, and international giant Shiseido has been investing robustly in the country through its CSR programme.
The new momentum around cosmetics and personal care in Bangladesh comes at a time when the country is tipped for healthy economic growth in the upcoming few years, as new consumer groups enter the market and per capita spending begins to rise.
The NBR’s tougher stance on tax suggests the government is gearing up to regulate with increased rigour as the FMCG market begins this development.