The National Board of Revenue (NBR) is contemplating a plan to conduct sudden drives at non-company entities, including beauty parlours and fast food shops, in a bid to find out foreign nationals working illegally there and evading taxes.
The decision came after a taskforce of the board failed to get any significant result in finding out such foreign nationals by visiting a number of companies during the last six months.
As per the Income Tax Ordinance 1984, foreign nationals working in Bangladesh are subject to pay 30 per cent tax on their income, and there is no tax-free ceiling for them.
A senior member of the NBR said there are many illegal foreign workers in the country, who are still untraced.
"The taskforce members have visited dozens of companies on the basis of information provided by the field-level tax offices," he said.
In most of the cases, they found that the foreign workers had valid documents, and were compliant with terms of tax payment.
He, however, said the strategies to conduct field inspections should be changed to get optimum results from the drives.
The taskforce members, under the income tax department, have planned to pay sudden visits to the taxpayers' addressees instead of giving them prior notice.
The NBR has reconstituted the taskforce for finding illegal foreign nationals and also revised the process of physical inspection to companies.
The newly-constituted 13-member taskforce includes representatives of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) and the Bangladesh Chamber of Industries (BCI) for providing advisory support to the taxmen.
The NBR member said the private sector trade-body representatives would not be allowed to accompany the field inspection teams as per the taxpayers' privacy protection provision, mentioned in the Income Tax Ordinance.
Sensitive accounts information of a company might be leaked due to the participation of trade association representatives during the field visits, he added.
A member of the taskforce stressed the need for intensive investigation by the intelligence team before conducting the field visits.
"We did not get the expected result from the field visits to the companies. The companies hide the information on their illegal foreign workers intentionally," he said
According to the taskforce information, there are some 0.4 million foreign nationals working in Bangladesh.
A number of companies employ their foreign workers in different names to hide their identities from taxmen and personnel of other law-enforcing agencies.
These illegal foreign workers stay in Bangladesh with tourist visas, he also said.
The taskforce member, however, noted that a field-level tax office found some 28 foreign workers without valid documents during a recent visit to a company.
Currently, the tax zone concerned is carrying out the field inspection under central supervision of the taskforce.
Most of the foreigners work in the Export Processing Zones (EPZs), pharmaceutical companies, manufacturing sector and garments factories, producing high-end products, he added.
NBR officials said the taxmen were conducting the drives cautiously, considering the country's need for Foreign Direct Investment (FDI) and technical know-how of the foreigners.
They said most of the foreign workers evade payment of tax with the help of their employers.
Taxmen will hold the employers responsible, if they find that foreign workers of the companies have left the country without paying the due tax to the public exchequer.
