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The National Board of Revenue (NBR) has moved to bring foreign nationals working for various government bodies without work permits under the tax net, aiming to enhance income-tax collection.
The NBR has recently requested all the ministries and departments concerned to check the visa category of the foreigners working under their purview and register them with the proper authorities if any of them are found to be working without a work permit.
In separate letters sent to the secretaries of various ministries, NBR Member (Taxes Legal and Enforcement) Mahmudur Rahman wrote that the government had given utmost importance on domestic revenue collection, in a bid to continue ongoing development activities for the implementation of the Vision 2041.
Terming income tax one of the major sources of revenue mobilisation, he wrote that the government had set a target to collect Tk 1.22 trillion in income tax in the fiscal year 2022-23.
Many of the foreign nationals are working in the country without taking prior permission from the Bangladesh Investment Development Authority (BIDA) and other appropriate authorities appointed by the government, Mr Rahman mentioned in the letter.
They are carrying various types of visas like A3, tourist, business, visa on arrival, and blank, thus remaining out of the purview of the income tax net, he wrote.
Mr Rahman referred to the section 16 (B) of the Income Tax Ordinance 1984, which mentions that employers of the foreign nationals, having no work permit from BIDA, shall be charged additional tax at the rate of 50 per cent or the tax payable on his income or Tk 0.5 million whichever is higher in addition to tax payable under the ordinance.
Also, he referred to the section 165© of the ordinance which states that an employer guilty of an offence for unauthorised employment of foreigners can be jailed for three years and fined Tk 0.5 million.
The NBR official requested the government secretaries to recheck the visa categories of foreign nationals working in their ministries, departments, projects or any offices under their authority and register them with the BIDA if anyone is found unregistered, to avoid any unwanted situation.
Shah Mohammad Mahboob, a director general with the BIDA, told the FE there was a move at the Ministry of Home Affairs to prepare a new visa policy where BIDA provided technical assistance.
Once the new visa policy is issued, the misuse of visa will be lessened to some extent, he said.
"The new policy has further specified who will get a visa or not," added Mr Mahboob.
According to a study of the Transparency International Bangladesh (TIB), conducted in 2019, the majority of an estimated 250,000 foreign nationals from 44 countries working mostly in private sector entities are employed without a mandatory appropriate visa and work permit.
The illegal foreigners are transferring an estimated $3.15 billion annually. As a result, the country loses at least $1.35 billion in revenue per annum due to tax evasion.
Contacted, Dr Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh, said the presence of a larger number of illegal foreign workers in the private sector was very much evident - and these workers were evading taxes.
Usually foreign nationals work in government projects with proper work visas but their payment of taxes depends on the nature of projects, he said. "The extent of irregularities (appointing illegal foreigners and tax evasion) in government offices and projects may be very minimal."
The NBR should check whether they have come under the employment category and if they are eligible for taxation, said Mr Mansur.