Unregistered foreign workers' unaccountable income

There is no exact statistic on how many foreigners are working in Bangladesh, in various sectors of the economy. This is so because official data show that only 27,842 foreign nationals are staying in the country with jobs or for other purposes and these individuals are sending money back (in foreign exchange) that constitutes outward remittance. Unofficial figures put the number of foreign nationals anywhere between 250,000 to more than half a million being employed in the country and they are basically unregistered and have jobs in various sectors.
The problem with all this is manifold. There is the question of security, i.e. criminality from certain groups of foreign nationals has become quite apparent in the financial sector. Then there is the issue of tax payment on their incomes. Since these foreign nationals are not all recorded, they are paid mostly in foreign currency which is arranged by their employers and this practice is putting a lot of pressure on foreign exchange reserves in the country. The Transparency International Bangladesh (TIB), a non-government watchdog body conducted a survey back in 2020 and it came up with a number of about 250,000 foreign nationals. Today, the net total of the outbound remittance annually is estimated to be about US$4.0 billion.
Now a pattern begins to emerge as to where a lot of the foreign exchange is going. Interestingly, these expatriates are not just engaged in the commercial sector, but there is evidence that a substantial number are also employed in the development sector. Many national and international NGOs employ foreign experts and a lot of them come and go on short-term visit visas. In fact, this is the modus operandi for all these individuals and although this travel arrangement is a hassle, it more than makes up for the trouble taken since the vast majority of this foreign workforce aren't paying any taxes here. As pointed out in a recent report published in this newspaper: "Economists and analysts see reflection of such gaps in demographic arithmetic in the improvisation with fiscal and monetary management as well as supply-chain mismatches. They also see security implications of such miscalculations."
The fact that their stay is unlawful would not have been possible without connivance of some officials. Obviously, their employers have an "understanding" with the powers-that-be which allow for this arrangement to continue year after year. Immigration has data on the frequent travel of individuals in and out of the country and had the issue been a priority one, it wouldn't have taken too much time to figure out who is "visiting" Bangladesh and for what purpose. The siphoning off of the foreign exchange has been going on for decades but now it has become a problem for the economy. Data point to a steady decline in the country's foreign exchange reserves and officially it stands around $19 billion as of November, 2023.
This illicit outflow of foreign exchange is part of the problem of capital flight from Bangladesh. As pointed out by experts, it is not simply a depletion of foreign exchange reserve that is at stake here, but also the national exchequer is being deprived of revenue worth about Tk120 billion per annum. That's a little more than $1.0 billion in the current exchange rate. Data from the World Bank's Global Knowledge Partnership on Migration and Development report in 2021 only accounts for $101 million repatriated legally in 2021. What this points to is that expatriates are repatriating 10 times more money than official estimates because no genuine effort has been made to take stock of precisely how many foreign nationals are working here.
Obviously, there is a need for expatriate workers' skill sets in the country. Otherwise, employers would not be paying premium wages and benefits to host this large foreign population here. But as pointed out recently by the Policy Research Institute's (PRI's) Executive Director Dr Ahsan H Mansur, "Actually, every foreign national--legal or illegal--here repatriate their income to their home country, which is obviously creating pressure on Bangladesh's foreign-exchange reserves."
Something has to change at policy level to make it mandatory for employers to register their foreign workers. This would bring them under the tax net and allow for the government to have, as pointed out by the PRI "better fiscal and monetary management". Some of the issues highlighted by companies or institutions that do employ foreign nationals in the country are firstly, cumbersome, time-consuming procedures in obtaining a work permit in Bangladesh. Secondly, most employers state that the tax-free arrangement that exists today is one of the biggest draws for expatriates to come and work in Bangladesh in the first place. Ultimately, it is up to the authorities whether they want this situation to continue as it is, or whether the rule of law should be mandatory for all nationals who work in this country.

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