The Financial Express

Govt drive fails to raise size

Number of foreign taxpayers remains static

9,500 foreign nationals have TIN in FY ’19

| Updated: November 15, 2019 17:51:39

Evaly and Fianancial Express Evaly and Fianancial Express
Picture used for illustrative purpose only — Collected Picture used for illustrative purpose only — Collected

The number of foreign taxpayers has remained the same during the last three years, despite the government's efforts to trace the illegal aliens.

The National Board of Revenue, or NBR, has devised fiscal policies, conducted physical inspection and formed taskforces in the last few years to raise the number of foreign taxpayers.

But the figure hovered at around 10,000 during the fiscal years 2018-19, 2017-18 and 2016-17 respectively, officials said.

The number of foreign nationals, having Taxpayers Identification Number, or TIN, was around 9,500 at the end of June 30, 2019 in Dhaka, according to data obtained by the FE.

Although the presence of foreign nationals in the ciuntry is understood to have increased, the number of work permits issued by the state-run Bangladesh Investment Development Authority, or BIDA, is negligible.

According to the agency's data, some 25,619 foreign nationals obtained work permits between 2011 and September 2019.

On February 4, 2018, home minister Asaduzzaman Khan Kamal told parliament that a total of 85,486 foreign nationals are working in different sectors within Bangladesh among which 67,853 are owners of business enterprises.

Still, a handful of these foreign nationals have TIN and pay taxes to the public exchequer in accordance with the income tax ordinance-1984.

According to the data of the income tax offices, the government received Tk 1.81 billion in taxes from foreign nationals in the last fiscal year.

The FE has collected data of four tax circle offices on the number of foreign nationals working in the capital.

For example, under circle 227 of the tax zone-11, some 1,035 foreign nationals paid Tk 347 million in income taxes.

Under circle-221, some 2731 foreign national have paid income taxes worth Tk 866 million last FY.

Under the ordinance, foreign nationals will have to pay taxes on their income at a rate of 30 per cent, if they stay in the country for more than 90 days.

Talking to the FE Monday, NBR chairman Mosharraf Hossain Bhuyian acknowledged that the number of foreign taxpayers is low compared with their actual size.

"Some employers conceal the actual payment information to their workers while some show them to be tourists. There is no doubt about tax evasion in this sector," he added.

He said the number of foreign nationals should be more than 10 million in the country.

Referring to the Bangladesh-China Chamber of Commerce and Industry, he said the number of Chinese workers is about 0.5 million in the country.

Similarly, the same scenario prevails in case of obtaining work permits for other foreign nationals.

A number of entities are authorised to issue work permits to the foreign residents including the Bida, the Bangladesh Economic Zones Authority, or Beza, and the Bangladesh Export Processing Zones Authority, or Bepza.

According to the Bida sources, of more than 25,000 foreigners, some 4,819 obtained work permit during FY 2018-19 and some 4,045 in FY 2017-18. Until October of the current fiscal, some 1,817 foreigners obtained work permit from the Bida.

Nabhash Chandra Mandal, a member of the Bida, said some 3,838 foreign companies were registered under the Bida until August 2019.

Also, there are some 41,000 locally-registered companies under the Bida, he added.

He said the existence of illegal foreign residents could not be checked by the ministry of home, though it has the data of exit and entrance of foreigners.

The data of the Beza shows some 93 foreign workers were employed in the country until November 11, 2019, who obtained work permits from it.

Beza executive chairman Paban Chowdhury said all 1,000 foreign workers of the economic zones have not obtained work permits from the Beza as their appointing authorities are different.

Foreign workers of the China Harbour in Mirsharai zone has been appointed by Navy while some 200 to 250 foreign workers got appointment from the Meghna Group for its $300 million chemical industry in the zone.

On the other hand, the Bepza said some 2,343 foreigners have work permits so far in all eight export zones in the country.

Earlier, the Centre for Policy Dialogue (CPD), in a study, has found that 16 per cent of all apparel factories in Bangladesh employ foreign individuals.

Executive director of the Policy Research Institute (PRI) Dr Ahsan H Mansur said an estimated four to five thousand foreign workers are employed in the readymade garment factories alone.

However, he said employing foreign experts should not be discouraged as it is needed for the transfer of technical know-how.

Foreign experts are getting higher payment for their work and should be brought under the tax net, he argued.

Taxmen will have to enforce the existing provisions of the law and strengthen its monitoring to trace the illegal foreign workers, he added.

People familiar with the situation said the number of foreign workers has increased significantly in recent years following the execution of the government's mega projects.

But income tax officials said the number has remained static to around 10,000 for the last three four years despite several efforts of the board.

In 2016, the NBR had formed a taskforce comprising several law enforcement agencies.

Taxmen also conducted physical inspection in some 30 factory premises of corporate taxpayers for tracing out illegal foreign workers and prepare a database.

Currently, there is no specific data on the number of foreign residents in Bangladesh.

The tax department also established tax booths in airports and land ports to ensure tax payment by foreign nationals before they leave the country. The tax booths are inactive now.

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