The National Board of Revenue (NBR) is going to launch a special drive soon for identifying the business firms that are recruiting foreigners illegally.
Once identified, such companies will have to pay penalty as per new provisions incorporated in the finance bill 2015, that came into effect from July 1, said a NBR official.
According to the recently passed bill, if found guilty, the companies will have to pay 50% additional tax from their total payable tax or Tk5 lakh fine, whichever is higher, as penalty for giving jobs to foreign nationals without necessary documents and work permits.
Apart from the penalties, benefits including tax holiday and other tax exemptions will be annulled if any company is found to be involved in such unscrupulous engagements, said the official.
“The field offices have been asked to get ready for taking the issue into cognisance as a drive will be launched within a month to identify the firms for penalising them as part of the move to boost the revenue collection,” said a top NBR official.
The NBR is assigned to collect Tk1,76,370 crore revenue for the on-going fiscal year. Of the total amount, the lion share will come from income tax wing worth Tk65,932 crore.
According to the Income Tax Ordinance 1984, a foreign national needs to open tax file if he or she lives in the country for 90 days in a year. They also need to present their tax clearance certificates from the NBR while crossing the immigration desk before leaving the country.
While delivering the budget speech on June 4, Finance Minister AMA Muhith said: “Despite the existence of large unemployment amongst our eligible workforce, a huge number of foreign nationals are being employed in our country most of whom are not within the tax net.”
The government has already started registering foreign nationals working in the country and that they would be brought under the tax net soon, the minister told the parliament.
Meanwhile, the income tax wing of NBR sent a letter to the leading chambers and employers’ organisations on July 1, asking them not to employ any foreigners illegally to avoid heavy penalty.
The letter was sent to Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), Metropolitan Chamber of Commerce and Industry (MCCI), Foreign Investors Chamber of Commerce and Industry (FICCI), Bangladesh Chamber of Industry (BCI), Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and Bangladesh Textile Mills Association (BTMA), and the Executive Chairman of the Board of Investment (BoI).
A good number of foreign workers evade taxes with the help of their employers as they stay in the country on temporary basis by renewing their work permits after every three months, alleged businesses.
“Many foreigners, particularly from India, come to Bangladesh with a three-month VISA, but they stay here for long period illegally,” said FBCCI Additional Secretary Shah Md. Abdul Khaleq, who looks after the NBR issues.
Khaleqhas requested the home ministry and board of investment, the two core authorities to monitor the issue properly, to check the issue carefully, so none can leave the country without paying taxes.
Acknowledging the receipt of the NBR letter, MCCI Secretary General Farooq Ahmed said, “We’ve have already circulated a notice among our members to aware them about the issue.”
“Although there is a need for expert workforce in businesses, we don’t encourage our members employing the foreigners illegally,” he said.
Currently, around 4 lakh foreign nationals, mostly from India, Pakistan, Sri Lanka, China, Taiwan, South Korea and some European and African countries are working in Bangladesh.
Most of the foreigners are working particularly in the readymade garment sector, IT and other manufacturing industries.
Usually, three government agencies-Board of Investment, NGO Affairs Bureau and Bangladesh Export Processing Zones Authority (BEPZA) approve work permits for the foreigners.
However, there is no such compiled list of foreigners working in Bangladesh due to lack of coordination among the government agencies concerned.
Although all the foreigners have to pay income tax at a rate of 30% on their income, only some 10,000 of them pay income tax annually while the rest depart the country without paying any tax.
According to the BoI data, around 12,000 foreigners are working in the country with valid work permits.
Source: Dhaka Tribune