Tax Evasion of Tk 5 Crore Unearthed in Bangladesh from Chinese Exported Goods
Bangladesh has once again discovered cases of tax evasion related to Chinese entities, causing concerns for the country’s authorities.
Over the past two years, numerous incidents involving attempts to evade taxes by Chinese companies operating in China or Bangladesh have surfaced. One significant issue for Bangladesh has been the export of goods from China to Bangladesh under false declarations, resulting in substantial losses to the country’s treasury.
A recent case involves the Bangladesh-based company Hans Trade International, which is accused of importing goods from China under false declarations in order to evade Tk 5 crore in revenue. During the investigation, Bangladeshi authorities found that the company claimed to be importing calcium carbonate from China. However, upon inspection, it was discovered that each bag of calcium carbonate contained separate sealed boxes. Further examination revealed a total of 1.7 million pencil batteries and 18 metric tons of locks hidden beneath the bags of calcium carbonate. It became evident that the company had imported pencils and locks while falsely declaring them as calcium carbonate to evade taxes totaling Tk 5 crore.
Consequently, cases of tax evasion and money laundering have been initiated against the company and the individuals responsible. Another similar incident involved Sino-Kemmed Trading Co., a Chinese company based in Guangdong, which falsely declared the import of coated calcium carbonate to their Dhaka-based associate, ‘NB Trading House,’ in May 2022. However, upon physical examination, Bangladeshi officials discovered 120 tons of high-value Dextrose Monohydrate concealed inside brown cartons labeled as coated calcium carbonate. The consignment, originating from Qingdao Port in China and arriving at Chittagong Port in Bangladesh, was carried in five containers. If undetected, this incident would have resulted in a loss of Tk 42 lakhs 13 thousand to the Bangladeshi treasury.
In September 2022, authorities in Bangladesh seized a container that was supposed to contain textile dye stuff imported from China. However, upon opening the container, it was found to be filled with approximately 900 packages of foreign cigarettes worth Tk 7 crore. In a previous case involving illegal imports of foreign cigarettes, Tianye Outdoor (BD) Co Ltd (TOCL), a subsidiary of the Chinese company Comefly Outdoor Co Ltd, was found to be engaged in tax evasion and fraud, amounting to Tk 21 crore and 57 lakh. Routine physical inspections by Bangladeshi officials led to the discovery of high-duty foreign cigarettes in consignments that had been falsely declared as containing cotton yarn from China.
Despite projecting itself as a reliable economic partner, China’s economic engagement has been marred by corruption and criminal activities. The Bangladeshi government should question China regarding how illegal consignments destined for Dhaka manage to pass through Chinese customs authorities.