The National Board of Revenue (NBR) has launched a fresh scrutiny of Bangladesh's pharmaceutical industry, seeking five years of production data for the country's 17 largest drug manufacturers to verify whether their declared output matches VAT returns.
The Large Taxpayer Unit (LTU) of the NBR's VAT wing has asked the Directorate General of Drug Administration (DGDA) to provide product-wise production records from the 2021-22 fiscal year onward under Section 82 of the Value Added Tax and Supplementary Duty Act, 2012.
Revenue officials plan to compare the production data submitted to the drug regulator with VAT returns to identify any discrepancies between actual production and declared VAT liabilities.
According to LTU officials, the exercise is part of routine VAT compliance monitoring aimed at improving transparency and strengthening government revenue collection. They said government agencies are expected to cooperate by providing information required under the law.
The initiative follows a recent high-level meeting at which Dr Rashed Al Mahmud Titumir, Prime Minister’s Adviser for the Finance and Planning Ministry instructed the relevant authorities to ensure that pharmaceutical manufacturers submit production reports to the DGDA in accordance with legal requirements.
Following that directive, the LTU intensified its information-gathering efforts. However, despite sending the request on May 12, the LTU has yet to receive an official response from the DGDA.
The delay has prompted questions within the revenue administration. Officials say it is unclear whether all pharmaceutical companies are regularly submitting production reports or whether the DGDA lacks a database that allows the information to be shared efficiently.
They believe a more effective system for storing and exchanging production data would improve transparency in the pharmaceutical sector and strengthen VAT compliance.
Sources at the DGDA said the regulator will first examine the legal provisions governing the LTU's request. It will review whether existing regulations require the department to retain such records or provide them upon request before deciding how to respond.
Industry representatives, meanwhile, questioned the need for duplicate reporting.
Sources at the Bangladesh Association of Pharmaceutical Industries (BAPI) said most companies submit production data to the DGDA once a year, and preparing similar reports every quarter creates an unnecessary administrative burden.
They argued that although the government advocates improving the ease of doing business, companies are often required to submit the same information repeatedly to different agencies.
They also noted that the VAT authority already has access to substantial information through Business Identification Numbers (BINs), VAT returns, raw material import records and other databases, making separate reporting requirements of limited value.
The LTU's request covers 17 leading pharmaceutical companies: Square Pharmaceuticals, Beximco Pharmaceuticals, Incepta Pharmaceuticals, Renata, SKF Pharmaceuticals, Aristopharma, Advanced Chemical Industries (ACI), ACME Laboratories, Essential Drugs Company, Drug International, General Pharmaceuticals, Navana Pharmaceuticals, Novista Pharma, Orion Pharma, Pacific Pharmaceuticals, Synovia Pharma and Ibn Sina Pharmaceutical Industry.
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