The issue of illegal foreign workers has finally been able to draw attention of the policymakers. The national budget for the current fiscal (2015-16) bears testimony to that fact.
The government, for the first time, has incorporated a penal provision into the Finance Act to punish any individual or a firm employing illegal foreign workers. The penalty for committing the offence is a bit heavy--- 50 per cent additional tax or Tk 0.5 million, whichever is higher.
That the National Board of revenue (NBR) is serious about the foreign workers issue is also manifested through the letters it has sent recently to major chamber bodies and trade associations explaining the objectives of the penal provision and requested them to make their members aware of the consequences of employing illegal foreign workers.
The tax authorities have also requested the Board of investment (BoI) to take necessary measures to discourage the local business entities from hiring unauthorised foreign workers.
The latest NBR actions, apparently, stemmed from one major concern---outflow of untaxed remittance. At the same time, the presence of substantial number of foreign workers--- an unofficial estimate puts the number at about 100,000--- does also highlight the shortage of skilled manpower in some selected industries and sectors.
The relevant government agencies do not have authentic statistics relating to the presence of illegal foreign workers in the country and the volume of money they have been sending back home every year. Beyond the legal transfer, a substantial amount, it is suspected, is being remitted through illegal or hundi channels.
Most foreign workers, both legal and illegal, come from India, Pakistan, Sri Lanka and China. Nearly 10,000 of them have tax files.
What might have prompted the authorities to impose the penal provision on the employers of illegal foreign workers is the big amount, nearly US$ 4.0 billion, reportedly being sent back home annually by Indian nationals working in Bangladesh.
From Indian workers alone, the government is supposed to get a handsome amount as tax. But the overall tax receipt on account of foreign workers has been an insignificant one.
It is suspected that the local business entities, mainly operating in the apparel and IT (information technology) sectors, taking advantage of legal lacuna help the foreign workers to evade payment of tax.
Under the current income tax law, a worker employed for less than 90 days is not required to open tax file. Most firms, allegedly, use this provision to help evade tax payments by the foreign workers. Â
Many employers do not bother taking permission from the BoI while employing foreign workers. The BoI does not have enough manpower and logistics to carry out search operations and detect the presence of illegal workers.
The law enforcing agencies are also not that much interested to detect the presence of illegal foreign workers. Even if they do, the employers do know the mechanism well how to 'divert' the attention of the law enforcers.
A few months back the law enforcing agencies launched raids across the Dhaka city to book the foreigners staying beyond their visa deadlines following the murder of a young man by an African national. However, the targets of that drive were the African nationals. The police have never been on the lookout for illegal foreign workers employed in a number of industries and in the services sector.
However, the job of finding out illegal foreign workers and deporting them is not vested with the NBR. Its main concern is getting tax revenue from anyone, be he or she a foreigner or a citizen of this country.
That is why the NBR is interested to see that local firms employ only the legal foreign workers who cannot evade tax because of the clearance their employers procure from the BoI.
But it is hard to ignore the reasons that have been forcing the local firms to hire foreign workers, both legal and illegal, at higher compensation packages. The apparel industry and the IT sector are not finding enough skilled hands locally for certain areas of their operations. There have not been serious efforts to fill up the vacuum either.
It is unfortunate that a country which has been moving heaven and earth to get employments for its manpower in the Middle Eastern and Southeast Asian countries and help beef up remittance inflow is allowing, knowingly and unknowingly, an outflow of a substantial sum in the form of remittance by both legal and illegal foreign workers.
The policymakers, with help from the industries and businesses concerned, should urgently locate the areas where there exists serious dearth of skilled manpower and initiate actions to create the same locally. Some industries, reportedly, are hiring foreign management personnel who they feel are efficient and competent. But, in reality, the local entrepreneurs can do without such hiring as enough of competent and efficient management personnel are now available locally. Â
zahidmar10@gmail.com
Of illegal workers and fund outflow
Shamsul Huq Zahid | Published: July 06, 2015 00:00:00 | Updated: November 30, 2024 06:01:00
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