NBR desks at immigration for income tax evading foreigners [ Tritiyo Matra News ]

NBR desks at immigration for income tax evading foreigners

Local February 21, 2016

The National Board of Revenue is going to set up income tax desks at immigration check posts to check whether outbound foreign nationals evaded tax during their stay in the country.
The board has taken the initiative to ensure that no foreign nationals working in the country can leave without payment of income tax amid allegations that a large portion of such taxes is dodged, NBR officials have told New Age.
Initially the check posts will be set up at international airports by June. Gradually, such desks will also be established at other immigration points particularly at border land ports.
Under the plan, a separate booth of the income tax wing of the NBR will be set up at immigration check posts where foreign workers will have to show the income tax clearance certificate before leaving the country.
Income tax officials deployed at the desks will verify the clearance certificate to be confirmed whether the foreign workers paid tax on their income.
Taxmen will collect due taxes on the basis of documents from the foreigners in case of failure of producing the tax clearance certificate.
Earlier in December 2013, the home ministry from an inter-ministerial meeting requested the revenue board for setting up such desks at immigration points to identify tax evading foreign nationals.
According to the Income Tax Ordinance-1984, the income tax rate for foreigners is 30 per cent of their salary or remuneration while taxes from their other incomes are subject to be deducted at sources at various rates ranging from 5 per cent to 30 per cent.
A foreign national needs to open tax file if he or she stays in Bangladesh for a period of 182 days or more in a year, or stays 90 days or more in a year after staying 365 days in previous four years.
They have to display their tax clearance certificates obtained from the NBR at the immigration check posts before leaving the country.
In the national budget for the current financial year 2015-16, the government has also restricted employment of foreigners without work permit and introduced heavy penalty and imprisonment for employers for infringement of the law.
The Finance Act empowers taxmen to fine a company and the owner Tk 5 lakh or 50 per cent of their total payable income tax and scrap all other tax benefits for recruiting any unauthorised foreigner.
‘We suspect that many foreign workers work in the country without taking work permit from authorities concerned including the Board of Investment and leave the country without paying any income tax in absence of proper monitoring and coordination among the government agencies,’ a high income tax official told New Age last week.
Even those having work permit also pay taxes in less amount by hiding their actual remuneration with the help of local employers, he said.
Now, the NBR has strengthened the monitoring on collection of applicable taxes from foreigners and implementation of the provisions of the law, the official added.
Immigration officials cannot prevent them mainly due to failure in identifying fabricated and manipulated documents and lack of orientation about the laws and rules related to income tax, the NBR officials said.
Taxmen can prevent such forgery by appointing its officials who issue tax clearance certificates at immigration check posts, they said.
The NBR will prepare a database of foreign nationals working legally or illegally in the country based on the lists of BoI, NGO Affairs Bureau, Bangladesh Export Processing Zone Authority, Department of Immigration and Criminal Investigation Department, the officials added.
Currently, there are no official data about the foreign workers in the country but taxmen estimate that several lakh illegal foreigners, mainly from neighbouring India, Pakistan, China and Sri Lanka, and many from the African and Western countries, are working in different sectors in the country.
According to different agencies including the Special Branch of police, more than 4 lakh foreigners are working in Bangladesh and most of them are illegal.
In 2013, India’s largest circulated technology magazine Siliconindia reported that five lakh Indians were working in Bangladesh and sent $3.7 billion as remittance in 2013. Bangladesh became the fifth highest source of annual remittance for India, the report said.
But around 12,000 foreign nationals on an average receive work permits from the BoI every year.
A few thousand more foreigners also work in the country with permission from BEPZA and a few hundred with permission from the NGO Affairs Bureau, the revenue board officials said.