According to the Guardian report, BAT is disputing a Tk1832.15 crore claim for unpaid VAT against its subsidiary BATB. However, multiple Bangladeshi courts recognised NBR's claim.
In a letter seen by the British daily, BAT sought for Blake's support by describing NBR's demands as “baseless” and hinted that the company had been mulling to the matter to the international court of arbitration.
Blake, upon receiving the letter, wrote on August 6 to the Bangladeshi authorities: “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.”
Highlighting the fact that the tobacco company paid more to the Bangladesh exchequer than any other company in last fiscal, she noted that the high commission was aware of Bangladesh government legal opinions stating that there was “no scope to hold the manufacturer liable to pay VAT on a retrospective basis.”
In 2013, UK Foreign & Commonwealth Office was forced to issue new guidelines to its staff about its relationship with the tobacco industry following a previous scandal when the British ambassador to Panama intervened on BAT’s behalf in 2012.
The guidelines stated that officials must not “engage with foreign governments on behalf of the tobacco industry, except in cases where local policies could be considered protectionist or discriminatory.”
Defending Blake, an official of the British High Commission said: “It is entirely appropriate that the UK government supports British businesses overseas. Our actions were in line with guidelines and the letter in question highlighted the original legal opinion that there was no legal basis for retrospective VAT.”