Foreign workers, remittance and tax

At long last, the tax revenue authority has decided to do something about the alleged tax evasion by foreign workers.
The National Board of Revenue has reportedly asked a number of companies to put their respective foreign workers on the payrolls and ensure payment of tax by the latter.
But the fact remains that no official agency is aware of the actual number of foreign workers, legal or illegal. The agencies concerned, including the ministry of labour and employment have never been interested to gather information on foreign workers notwithstanding the fact that these workers are taking out more than $5.0 billion annually. The annual remittance earning of Bangladesh now hovers at around $12 billion.
The amount of money remitted from Bangladesh annually does not match with the number of foreign workers working with valid permits. It is almost certain that a large number of workers are staying in Bangladesh illegally. And a large number of these workers are employed in the apparel sector where there is serious dearth of skilled hands in merchandising, production and designing. The employers do not show illegal alien workers on their payrolls for fear of being detected.
Obviously, employers would not have employed illegal foreign workers if local hands were available locally. The wage structure for local workers and employees is always lower than that of foreign workers. But the non-inclusion of foreign workers in the payrolls does deprive the country of tax revenue that is levied at a flat rate of 30 per cent. It could be that the employers have been reaping some financial gains out of non-payment of tax to the national exchequer on account of foreign employees.
The Bangladesh Bank data show that foreign workers remit more than $5.0 billion annually from Bangladesh. Had all the foreign workers paid their tax honestly, the country would have earned Tk 120 billion worth of revenue. But the actual earning remains a paltry one that the NBR would not even like to mention.
Neighbouring India alone had received remittances worth $ 3.2 billion from Bangladesh in 2015. The amount is more than what that country got from the UK where more than 1.4 million Indians live.
There is no denying that sectors where there is dearth of local skilled hands will be filled up by foreign workers. But, at least, two issues --lack of efforts to develop locally the skills that are in high demand and ensure the registration of all foreign workers - cannot be overlooked.
Foreign workers have been entering the country in large numbers during the last few years to fill up jobs where local hands are not available in adequate numbers. But there has not been any serious effort either on the part of the government or the production units concerned to help develop sufficient skilled hands locally.
As far as issuing of work permits is concerned, too many organisations have been authorised to do the job. Besides the Bangladesh Investment Development Authority (BIDA), the Export Processing Zones Authority and the Department of Passports and Immigrations do issue work permits and approve their extensions. There is no coordination between these organisations. Nor any government agency keeps track of the foreign workers centrally. It is more of a free-for-all situation. But it needs to be corrected immediately since the country cannot afford losing so much of foreign currency and tax revenue on account of foreign workers.

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