UK envoy lobbied for VAT waiver of BAT: Report

The UK foreign office encounters a major lobbying row after a senior diplomat has been seen lobbying in favour of British American Tobacco (BAT) to evade unpaid VAT in Bangladesh.

According to a report published in British daily The Guardian, Alison Blake, the British high commissioner to Bangladesh, is lobbying on behalf of British American Tobacco (BAT) after it sought her help in a long-running battle with Bangladesh's revenue authorities.

BAT is disputing a £170m claim for unpaid VAT brought by the government of Bangladesh against it, says the report in The Guardian. 

Although the claim has been recognised in the courts, BAT sought help from the British high commissioner through a letter.

In the letter BAT boasted of its “proud history of more than 105 years of investment and revenue contribution in Bangladesh”, reports The Guardian.   

After receiving the letter, Blake supported the arguments made by BAT in a letter to Bangladesh government saying, “I am writing regarding the long pending VAT case of British American Tobacco Bangladesh which we have discussed a number of times before and on those occasions I felt assured that your honourable office was determined to resolve the matter.”

The high commissioner highlighted the fact that BAT paid more to the exchequer than any other company last year.

She also noted that the high commission was aware of government legal opinions stating that there was “no scope to hold the manufacturer liable to pay VAT on a retrospective basis”.

Blake in her letter to the government noted her attempts to involve Law Minister Anisul Huq and Attorney General Mahbubey Alam through Finance Minister AMA Muhith for bringing about an out-of-court settlement. But somehow these meetings could not be held, she said.

This is not the first time the Foreign Office has found its relationship with BAT under scrutiny, says the Guardian report.

In 2015 the British high commissioner in Pakistan attended a lobbying meeting between BAT and the country’s finance ministry at which the company protested about proposed tobacco control measures.

The extraordinary intervention has provoked anger among health organisations and transparency campaigners, both in the UK and in Bangladesh, who say that it breaches strict World Health Organisation rules on lobbying, The Guardian reports.