NBR forms data bank cell to realise income tax from foreign workers

Syful Islam | Published: April 13, 2016 00:00:00 | Updated: February 01, 2018 00:00:00

With an aim to stop tax evasion by foreign nationals working in Bangladesh, the National Board of Revenue (NBR) formed last week a data bank cell empowering it to penalise employers as well for same offence, officials said.
At the same time, the NBR also formed a steering committee, headed by its chairman, to oversee the activities of taskforces which will work in Dhaka and Chittagong for realising taxes from foreign nationals, they added.
NBR Member (Taxes Legal and Enforcement) will head the 10-member data bank cell which has been tasked with collecting data from all concerned on foreign nationals working in Bangladesh.
They will devise work plan for designing database software for listing the foreign nationals. They have also been asked to prepare a draft plan for developing software which will check information about income tax payments at airports in Dhaka, Chittagong and Sylhet as well as other check points.
The cell will also prepare a database of the foreign nationals working in Bangladesh for the revenue board.
Meantime, the 17-member steering committee, led by NBR chairman, has been tasked with monitoring the activities of taskforces working in Dhaka and Chittagong for realising income tax from the foreign nationals and penalise their employers in case of non-payment of taxes.
The steering committee will prepare work plan for the taskforces and set timeframe for implementation of work plan and submission of report.
According to NBR officials, every year around 12,000 foreign nationals receive work permits from the Board of Investment (BoI). Besides, a significant number of foreigners get their work permits renewed every year.
However, tax officials have found that both legal and illegal foreign workers evade a significant amount of money as income tax. Â
The revenue board officials have found that the foreign workers who are working legally in Bangladesh evade paying tax with the help of their employers by showing less income or not registering with the income tax offices.
The budget for the fiscal year 2015-16 incorporated a provision in the income tax law empowering the revenue board to penalise the foreign nationals and their employers in case of non-payment of income tax. The provision aimed at realising income tax from the foreign workers who remained out of tax net.
According to the Income Tax Ordinance, the foreign workers are required to pay 30 per cent tax on their incomes. No tax-free ceiling for the foreign citizens has been kept in the act.
Officials said the fiscal budget for 2015-16 has imposed restrictions on employment of foreign nationals without work permit. Tax officials can impose penalty on the companies and owners as much as 50 per cent of their total payable income tax or Tk 0.5 million, and scrap all other tax benefits as fines for recruiting unauthorised foreign nationals.
Meanwhile, the revenue board has planned to set up check-posts at immigration points by June this year to make sure that no foreigners can leave the country without paying due taxes. Foreign citizens have to show tax-clearance certificates at immigration points before flying out of the country.
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