The Financial Express

Recast task force to sniff out tax evasion of foreign workers

| Updated: July 16, 2018 14:35:17

Internet photo used for illustrative purpose only Internet photo used for illustrative purpose only

The income tax authority has reconstituted the task force assigned to track tax evasion by foreign nationals working in Bangladesh.

Representatives of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) and the Value Added Tax (VAT) intelligence wing have been excluded from the task force.

A senior official at the National Board of Revenue (NBR) said the task force was reconstituted keeping in mind the legal obligation to maintain secrecy of the taxpayers' information.

Under the Income Tax Ordinance 1984, taxmen are bound to ensure secrecy of the information furnished by the taxpayers.

Foreign nationals have to pay tax at the rate of 30 per cent on their income.

"Companies pay tax under different jurisdictions. The concerned tax zones would be eligible to conduct inspection of the companies to sniff out foreign nationals working illegally," the tax member said.

However, officials at the Central Intelligence Cell (CIC) would be allowed to accompany the taxmen during the inspection, he said.

Earlier in 2016 the NBR formed an integrated national task force to track foreign nationals working illegally with different companies and not paying income tax.

The task force comprised of representatives from different agencies including the FBCCI, the VAT wing and the Bangladesh Investment Development Authority (BIDA).

It also had representatives from the Special Branch of Police, Directorate General of Forces Intelligence (DGFI), National Security Intelligence (NSI), Bangladesh Bank (BB), Ministry of Home Affairs, Bangladesh Export Processing Zones Authority (BEPZA), Department of Passport and Immigration, and the NGO Affairs Bureau.

Later, the task force was divided into two parts-one for Dhaka region and the other for Chattogram region.

Last year, the income tax wing selected 40 large companies for inspection on the basis of information provided to the field-level tax offices.

Until June 30 last, the task force inspected about 20 companies to assess tax compliance of foreign workers.

A senior tax member of the NBR said the task force's findings during the inspections were not up to the expectation.

They found less than the expected number of foreign officials in those companies.

Allegations have it that a large number of foreign nationals are working in the country, but it is not reflected in the official data.

The taxmen issued notices prior to inspections at the companies.

He said the companies were seizing the opportunity to conceal actual information in their foreign workers as they got prior notice.

"We are planning to change the strategies of inspection. Taxmen may conduct surprise visit to the companies in future to find out illegal foreign employees," said the tax member.

The task force would take a decision in this regard shortly in its upcoming meeting, he added.

Earlier, the NBR had also planned to prepare a data bank on tax payment by foreign nationals on the basis of information received from the organisations employing them.

Foreign nationals have to show and submit tax clearance certificates at the airports and land ports as per Income Tax Ordinance 1984, Section 107 at the time of departing the country.

Many of the foreign nationals are working in the country's engineering, medical, garments, merchandising and other industrial units.

There are allegations that there are foreign workers working illegally in many companies.

They are receiving fat pay packages but leaving the country without paying any tax.

Tax officials alleged that the foreign nationals evaded payment of tax with the help of their employers.

They said the employers would be held responsible for tax evasion by their foreign officials.

Taxmen would realise taxes from the employers in the event of tax evasion by their foreign employees leaving the country.



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