The government will soon bring foreign nationals working in Bangladesh under the tax net.
Apart from, a penalty measure will be imposed for companies employing foreigners if they do not collect necessary documents and work permit before the appointment, said Finance Minister AMA Muhith while unveiling the budget for FY15-16 on Thursday.
If fail, the companies will have to pay 50% of their total payable tax or Tk5lakh, he said.
“I propose to impose 50% additional tax or Tk5 lakh (whichever is higher) for the persons employing unauthorized foreign nationals. I also propose cancellation of tax holiday and other tax exemptions facilities along with prosecution and punishment for these unscrupulous entities engaged in such unlawful acts,” he said.
Muhith said the government has already started registering foreign nationals working in the country and they will be brought under tax net soon.
“Despite the existence of large unemployment amongst our eligible workforce, huge numbers of foreign nationals are being employed in our country most of whom are not in tax net,” he said.
Currently, around four lakh foreign nationals are working in Bangladesh mostly from India, Pakistan, Sri Lanka, China, Taiwan, South Korea and some European and African countries, sources said.
Usually, a number of government agencies including Board of Investment, NGO affairs bureau and Bangladesh Export Processing Zones Authority (BEPZA) approve work permits for the foreigners.
However, there is no such compiled list of foreigners working in Bangladesh as there is no coordination between the government agencies responsible for giving work permits to foreigners.
According to the Income Tax Ordinance-1984, a foreign national needs to open tax file if he or she lives in the country for 90 days in a year.
They also need to present their tax clearance certificates from NBR while crossing the immigration check posts before leaving the country.
The foreigners have pay income tax at the rate 30% on their income, however, sources said that only some 10000 of them pays income tax annually.
According to BoI data, only around 12,000 foreigners are working in the country with valid work permits from the authority.
Currently, there are three tax circles in Dhaka and two in Chittagong to collect income tax from foreigners.