12.60 lakh foreigners stay illegally in Bangladesh

Over 12.60 lakh unauthorised foreigners have long been living in Bangladesh, a document prepared by the Board of Investment (BoI) reveals.

This document contains proposals from local and foreign entrepreneurs for employment of foreign workers.

However, out if these huge illegal outsiders, only around 12,000 foreigners are listed with the National Board of Revenue (NBR), who pay taxes on regular basis.

As per an estimate, the national exchequer suffers a net loss of Tk 1000 crore a year, as a huge number of foreigners are working without valid work permits evading tax payment. In this process around US$4 billion or Tk 32,000 is being drained out of the country a year, officials said.

These foreigners are employed in various important positions of various private installations and establishments, from managers to general workers, mostly in productive sectors.

As government insists on widening tax net, the NBR has already started a drive from the first day of the present fiscal year (2015-16) to realize taxes from the foreigners working here.

According to NBR, a working foreigner having work permit has to pay 25-30 per cent of his or her income as tax as per rule. No tax can be collected from those who have no work permit. However, foreigners are working in Bangladesh with various categories of visa.

“Although around 12,000 have valid work permits and are paying taxes, a huge number of foreigners who are working in various capacities with valid work permits pay no taxes at all causing colossal loses to the national exchequer,” an NBR official told the Daily Observer.

As part of this process, the NBR has sent letters to different local and foreign offices requesting them to inform the tax administration of how many foreign nationals are working with them.

NBR field level officials have been instructed to strictly follow the Section 107 of Income Tax Act, 1984, which makes submission of a tax clearance certificate to the Immigration Office for a working foreigner’s mandatory before his or her departure from the country. The Section 107 also made it clear that without obtaining a release letter about tax payment, the foreigner concerned should not leave Bangladesh. Officials pointed out that from five circles –three from Dhaka and two from Chittagong and Khulna– the highest amount of taxes are supposed to be collected from foreigners.

A survey revealed that the authorities concerned like BoI, Bangladesh Chemical Industries Corporation (BCIC), Bangladesh Export Processing Zones Authority (BEPZA), Special Economic Zones Authority (SEZA), Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers & Exporters Association (BKMEA) and the National Board of Revenue (NBR) have no list of the foreigners working in Bangladesh.

Otherwise, foreigners are working in various composite textile mills, buying houses, merchandise companies, rental and quick rental power stations, international construction companies, fashion houses, food producing firms, marketing organisations, mobile phone companies, leather and leather goods manufacturing companies, spinning mills, , medicine manufacturers, ad firms, NGOs, missionary offices, show rooms and others organizations.

Although prior permission from various organisations is needed for the foreigners to work in this country, these organisations have failed to register those people.

These illegal foreigners are mostly from Sri Lanka, Japan, Korea, China, Africa, European Union and India, who are employed in key positions in various establishments showing them as skilled workforce. Officials at BGMEA, the apparel sector’s apex trade body, has claimed that lion’s share of these foreigners are working in the readymade garment (RMG) sector.

Criticising the non-registration of the working foreigners, Dr AB Mirza Azizul Islam, a former finance adviser to a caretaker government, said such illegal workers should be identified on priority basis and actions be taken thereof. “Priority should be given to train up local work forces to replace the foreign nationals. Once we have sufficient trained and skilled workforce, there would be no room for employment of foreigners,” he suggested.

Siddiqur Rahman, President of BGMEA, said buyers are urging the entrepreneurs to enhance workers’ efficiency as there was no alternative to human resource development for better productivity. To remain competitive in the global market, he said, the government should set a special rate of currency for the RMG sector as the competitor countries witnessed devaluation of dollars. When asked, an NBR official said they are contemplating to implement a system recently to register the foreigners on arrival at the airports in Dhaka and other cities, in line with a policy to collect taxes from foreign workers in Bangladesh. “Once this policy is in place, we expect a huge amount of taxes from the foreigners employed in our country in the next fiscal year,” the official added.

A BoI official is also upbeat on proper registration of foreigners soon as the state-run investment promotion body has recently been digitalised.