The National Board of Revenue (NBR) has uncovered evidence of approximately Tk 120 crore in VAT evasion by the prominent industrial conglomerate, Transcom Group. Despite the findings by the VAT Audit, Intelligence, and Investigation Directorate, the recovery of these funds remains stalled due to alleged bureaucratic negligence, lack of coordination within NBR, and tactical maneuvers by the company.
The Evasion Tactic: Reclassifying Services
According to investigation documents, the VAT intelligence team initiated an audit into Transcom Limited (registered in South Kamalapur) in September 2023, covering their operations from 2017 to 2022. The primary investigation report, submitted on April 10, 2025, revealed a massive revenue gap.
The report highlights that Transcom utilized a specific accounting head titled “Management Expense.” While labeled as an expense, investigators found it was actually used to hide income. Furthermore, to avoid higher taxes, the company allegedly amended its VAT registration during the investigation to reclassify its operations as “Information Technology Enabled Services (ITES).”
This strategic shift allowed Transcom to pay only 5% VAT instead of the standard 15%. Had the company followed the standard rate, the total claim would have exceeded Tk 120.30 crore. By shifting to the 5% bracket, the company reduced its recognized liability to approximately Tk 62.59 crore, resulting in a direct loss of over Tk 57 crore to the national exchequer.
NBR’s Inaction and Bureaucratic Delays
Despite the submission of the investigation report over a year ago, there has been no significant progress in recovering the dues. For the past seven months, the matter has been caught in a cycle of correspondence between the VAT Policy Wing and the Investigation Directorate.
In December 2024, the Director General of the VAT Audit Directorate, Muhammad Zakir Hossain, sought a formal decision from the NBR Policy Wing regarding whether the 15% or 5% rate should apply to “Management Expenses.” However, a definitive ruling is still pending. Critics fear that this delay provides Transcom with a loophole to evade legal consequences through a “time-out” strategy.
Transcom’s Defense
Transcom Group has denied the allegations of foul play. In written explanations submitted during hearings, the company argued that the “Management Expense” mentioned in their audited accounts is actually “IT Support Service.” They maintain that under NBR’s VAT laws, ITES attracts a 5% rate. They also noted that the respective VAT Commissionerate initially accepted their 5% payments without objection, prompting them to request a revision of the NBR’s original demand.
Shadow of Forgery and Internal Scandals
The VAT evasion scandal follows a series of other grave allegations against Transcom’s top leadership. Investigative reports have previously linked the current CEO, Simin Rahman, to asset misappropriation and share forgery.
It is alleged that documents submitted to the Registrar of Joint Stock Companies and Firms (RJSC) regarding Simin Rahman’s shares were fraudulent. Specifically, a stamp paper submitted in 2020 was allegedly created in 2023. There are also claims of suspicious filings made on Saturdays (public holidays) to bypass standard scrutiny.
Furthermore, the controversy extends to the suspicious death of Arshad Waliur Rahman, the only son of the group’s founder, Latifur Rahman. While Simin Rahman and other accused individuals were recently acquitted in a share forgery case, these recurring allegations of financial and procedural irregularities continue to haunt the group.
Official Response
When contacted via WhatsApp for a comment, Transcom Group CEO Simin Rahman did not respond. Similarly, Director (Corporate Finance) Abdullah Al Mamun declined to comment. On the NBR side, Md. Azizur Rahman of the VAT Policy Wing claimed he was unaware of the specifics but suggested that the matter would eventually be resolved through “tripartite discussions.”
As the new fiscal year begins, the lack of effective measures to collect the outstanding Tk 120 crore has raised questions about the NBR’s commitment to holding large corporations accountable.
