Moves to streamline foreigners’ jobs in Bangladesh fall flat
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All major steps taken by government agencies to check on illegal employment of and tax evasion by foreign nationals and to make a database of such nationals have remained mostly in some recoverable format even after over fifty percent a decade.
The federal government agencies have didn't ensure the payment of salaries and remunerations to foreign personnel through the banking channel, leaving the scope widely open for tax evasion even by legal foreign workers.
Though there are no formal or institutional figures of foreigners employed in the country but various estimates say that the quantity is between 5 lakh and 10 lakh.
The National Board of Revenue said that 10,000 foreign personnel submitted their taxation statements in the recent past fiscal year but home minister Asaduzzaman Khan told parliament the previous year that 85,486 foreigners from 44 countries were legally working in several sectors of Bangladesh.
Transparency International Bangladesh in a study in February 2020 said that at least 2.5 lakh foreigners from 44 countries were employed in Bangladesh legally and illegally and were draining out at least $3.15 billion or Tk 26,400 crore each year.
The NBR in early 2016 formed two regional task forces, one in Dhaka and the other in Chattogram, to develop a database and conduct drives at firms for detecting illegitimate foreign workers, without the progress in the problem, according to officials.
The activities of the task forces and the other moves have almost fallen flat despite making efforts and because of insufficient live data, NBR member (legal and enforcement) Nahar Ferdousi Begum told New Age on Thursday.
‘We have sent a proposal to the Special Branch of the police to talk about live data around however the agency is yet to agree,’ she said.
The other initiatives included conducting drives at factories and organizations to detect illegitimate foreigners by the NBR and upgrading the minimum wage structure for foreigners by the Bangladesh Investment Development Authority.
An intelligence agency on August 2 in a letter to the house ministry and the NBR also expressed concern over tax evasions and money laundering by foreign employees taking the benefit of cash payment system and the very low minimum wage structure.
The income authority also setup tax booths at major immigration check posts, including at Hazrat Shahjalal AIRPORT TERMINAL and the Benapole land port, to verify the tax payment status of the foreign personnel throughout their departure from Bangladesh.
None of the three initiatives has materialised.
The proceed to review the minimum earnings structure, first taken in 2013 by the formerly Board of Investment, now BIDA, is yet to see any success.
The NBR taskforces have not been conducting any drives going back 2 yrs after it found few against the law foreign workers, due to various practical reasons, during earlier drives at numerous business firms, officials said.
No tax officials were deployed either at the income tax booths at the immigration check posts during the period, they said.
The duty force concerned and TAX Zone Dhaka-11, the dedicated tax office for foreigners, also sought the list of foreign workers for many times from local employers but met with little response.
The database development has been facing impediment as the SB has been declining to provide real-time data about registered foreigners.
The NBR prepared customised software in 2018 to develop the database nonetheless it remains useless because of insufficient real-time intelligence data as the SB provides three-month old dataset declining to supply real-time data on information security ground.
Bangladesh Police’s special branch deputy inspector general Md Mazharul Islam cannot be reached for comments despite several attempts.
NBR member Ferdousi said that it was not possible to discover illegal foreign employees until or unless local employers cooperated, she said, adding that employers kept the against the law workers undocumented and made their payment in kind, instead of by bank transfer.
She said that chasing foreigners to identify illegal workers was not the right way which measure was practically almost impossible to put to practice.
‘How can the NBR find illegal foreign workers if the employers claim, when queried by NBR officials, they are their guests or visitors and if they make payment to them beyond the banking channel?’ she questioned.
The NBR, however, is continuing its efforts to get success, though it will require time, she added.
The federal government through the Finance Act-2015 introduced a strict penal provision against the unauthorised recruitment of foreign nationals - without the prior approval of the BIDA and other relevant agencies.
An employer will face imprisonment for up to three years plus a fine as high as Tk 5 lakh and withdrawal of tax benefit for such recruitment, based on the law.
So far, the NBR has didn't implement the law though several lakh foreign nationals coming with tourist visa work in Bangladesh, officials said.
There are also criticisms that the planned moves will create negative impression, including of harassment, among the foreign investors being stopped at the airports and being chased.
The earnings board also doesn’t have the legal mandate to chase a tourist just based on the suspicion that they could work illegally, they added.
Besides the illegitimate workers, legal ones are also evading tax by making use of local employers who pay a large chunk of their salaries and other remunerations evading the banking channel to avoid paying income tax at the rate of 30 % applicable for the foreign employees, they said.
As per the tax law, an employer should pay the foreign workers their salaries and remunerations above Tk 15,000 per month through bank transfer so you can get tax exemption on the payment.
The intelligence agency in its letter commented that the declared salaries and allowances for foreign workers were unbelievable and inconsistent with their education, work experience and status and with the country’s overall labour market situation.
‘The salaries mentioned so you can get the security clearance for foreign nationals seemed lower than what they actually receive and they declare low salaries to evade tax,’ the agency said.
In an investigation in addition, it found that most of the foreign employees receive their salaries in cash and launder money to their country through hand notes.
The agency recommended fixing a satisfactory earnings structure for giving work permits to foreigners in addition to ensuring providing bank-account details for security clearance.
The current minimum salary structure for country-wise foreign employees - from technicians to leader officer- stipulates suprisingly low pays which range from $650 to $2,000 monthly.
The February TIB study discovered that the declared monthly average earnings of a foreigner was only $600 or Tk 50,000 in FY19, though the lowest monthly earnings was actually no less than $1,500 in the year.
BIDA executive member Nabhash Chandra Mandal said that they could not revise the earnings structure due to dissimilarities of opinions among the stakeholders.
While a growth in minimum salary will increase NBR’s tax collection many say that it'll improve the outflow of forex, he said.
He, however, said that the BIDA had prepared a draft earnings structure by amending the guidelines and that might be finalised soon.
The BIDA said that around 26,000 foreign nationals obtained work permits between 2011 and 2019.
In 2013, India’s largest-circulated technology magazine Siliconindia reported that five lakh Indians were employed in Bangladesh who sent $3.7 billion in remittance in the year.
In 2015, a report based on World Bank Remittance Data, conducted by the Pew Research Centre, showed Bangladesh as the 5th major remittance source for India and a lot more than $4.08 billion was remitted to India from Bangladesh in 2012.
In line with the home minister’s statement in the Jatiya Sangsad, 35,386 of the foreigners employed in Bangladesh were Indians, the best from a single country, followed by 13,268 Chinese.
Aside from the Indians and Chinese nationals, a large number of men and women from Sri Lanka, Pakistan, Vietnam and from many European and African countries are also working legally and illegally, especially in readymade garment, textile, buying houses, manufacturing, IT sectors, in Bangladesh.
Source: https://www.newagebd.net
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