Dhaka, Bangladesh
Tax dodging by foreign workers

Tax dodging by foreign workers

It has been learnt that TK 264 billion is being illegally siphoned off in the form of remittance outflow from Bangladesh every year by nearly three lakh foreign workers. According to a report, Bangladesh Bank data show that about US dollars 45 billion is legally remitted outside the country while TK 264 billion is going out illegally. With this, our state coffer loses TK 120 billion in taxes a year. The authorities concerned in Bangladesh seem to be unaware about the outflow of such a hefty amount of remittance through illegal means by most of the foreign workers employed in Bangladesh. Thanks to poor monitoring and reluctance of employers of foreign workers to disclose their actual pay packets, the relevant authorities in Bangladesh are unable to detect and stop the means through which the foreign workers siphon off an enormous sum from Bangladesh. Most of the foreign workers engaged in garment, IT, light engineering and automobile sectors stay in Bangladesh without work permit and on tourist visa which is absolutely illegal. To dodge taxes, a large number of highly paid foreign employees in Bangladesh show lesser salary than the real amount and use illegal means like hundi. Only 9,500 workers pay taxes, but even then they do not show their actual wages in connivance with their employers. This irregularity results in depriving the government coffer of huge amount of money in revenue, according to the report. Foreign workers remit money to their homeland without paying required income taxes to the Bangladesh National Board of Revenue (NBR) and stay outside the tax net. Less than two years ago, media reports quoted the then finance minister to have stated that as much as 5 billion US dollar was siphoned off from Bangladesh every year by foreign nationals working mostly in the export-oriented sector. On this information, our financial authorities should have seriously examined and addressed the tax evasion issue. However, in this era of global economic cooperation employment of foreign experts and workers are common in almost all countries. The emerging economy like Bangladesh needs a lot of foreign experts including civil engineers, architects for implementation of ongoing mega projects, managements officials to handle effectively the human resources in export-oriented manufacturing sectors. Our country also needs Information Technology experts and software engineers. According to the report, 1,60,000 foreign workers are illegally employed in Bangladesh and they are working here illegally on tourist visa and without any work permit. They are not only evading taxes, but also squeezing job opportunities for local people. It is, therefore, high time to deal strictly with the issue of tax evasion by foreigners and to list and regulate the foreign employees in Bangladesh.

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