Working in the shadows, outside NBR’s lens

Foreign nationals working in various sectors across Bangladesh are illegally remitting out around Tk26,000 crore per year, as revealed by a report of Transparency International Bangladesh (TIB). 

In the research findings published on Wednesday, TIB said, "Information collected from multiple sources have revealed that at least 2.5 lakh foreign nationals from 44 countries are working in Bangladesh through legal and illegal means. 

"A large portion of those foreigners are evading taxes. Meanwhile, some are illegally working in the country and taking their income abroad without paying any taxes at all. The Bangladesh government is losing around Tk12,000 crore because of such practices."

Data from the Bangladesh Bank show that Tk58.81 crore has been legally remitted out of the country in fiscal year 2018-19. A total of 9,500 foreign nationals filed tax returns to the National Board of Revenue, showing an income of Tk603 crore.

Data indicate that no government organisation has accurate statistics regarding the matter, said TIB.

The graft watchdog pointed out that the issue is being caused by a lack of specific policy on the employment of foreign nationals in Bangladesh, and the absence of a designated authority of enforce that policy.

Commenting on the matter, TIB Executive Director Dr Iftekharuzzaman said, "Most countries have an authoritative body to deal with such matters as appointment and regulation of foreign workers. 

"Bangladesh has laws on such matters, but it lacks an authoritative body. Therefore, owners are bringing in as many foreigners as they want and employing them in their companies without any scrutiny."

The TIB research further revealed that some organisations are hiding the true amount of salaries being paid to foreign employees. 

Discussing the garment sector as an example, the TIB report said that if a foreign national makes Tk8-9 lakh per month by working as a chief executive officer, the company documents show the total salary as being around Tk1.5 lakh. 

The appointing companies are hiding the salary amount of their legal and illegal foreign workers, which in turn is allowing those foreigners to evade taxes. The government is being deprived of a large amount of tax revenue in the process, says TIB. 

The anti-graft watchdog further said, "Information collected from officials of various government and non-government organisations indicate that around 2.5 lakh foreigners work in Bangladesh. 

"However, the total number of foreign workers in the country could be much higher than this estimate."

Foreign workers at a glance

No organisation currently has accurate data on the number of foreigners working in Bangladesh. However, TIB research shows that the readymade garment and textile sector employ the most number of foreigners.

Other sectors that employ foreigners are –various government development projects, power plants, international non-government organisations, hotels and restaurants. 

As Bangladesh lacks any integrated and effective policy on the matter, there is no specific authority to regulatethe employment of foreigners. 

Because of this reason, the TIB gets complaints over the legality of many financial transactions,validity of foreign workers' appointment process and scrutiny on their movement. 

The TIB conducted the research from April 2018 to December 2019. 

How foreigners work illegally?

The TIB research showed that among the illegal foreign workers, most are doing it by violating their visaconditions. 

Many foreigners enter Bangladesh through tourist visa or on-arrival visa. A lot of them then join different organisationsand start working without any authorisation.In most cases, organisations that employ foreigners, do not mention them in documents.

Those organisations also hide the accurate amount of salary given to foreigners by showing a much lower amount in the documents. This practice helps them evade income tax.

Many companies pay their legally recruited foreign workers a small fraction of their salaries legally, and then pay the rest illegally in cash. Foreigners who work illegally get their entire salary in cash or get paid through bank accounts in other countries.

These foreign workers also get allowances, housing, transportation and other facilities from the companies, said the TIB research.

TIB on number of foreign workers

According to the TIB research, around 8 lakh foreign nationals visit Bangladesh every year on tourist visas. Among them, at least 50-60 percent start working illegally in the country.

However, tourist visas must be renewed every three months. So the estimated number of foreign workers employed illegally stands at around 1.6 lakh. Add that number to the 90,000 legal foreign workers, and the total becomes at least 2.5 lakh.

Government information

In December last year, the Ministry of Home Affairs revealed that there are 85,496 foreign nationals working legally in Bangladesh. 

At a press conference in 2017, the Ministry of Expatriates' Welfare and Overseas Employment said that the country has in focus around 2 lakh legal and illegal foreign workers. 

The Bangladesh Investment Development Authority (BIDA) authorized a total of 11,180 foreign workers in the 2018-19 fiscal year.