Dhaka, Bangladesh (BBN)-Efforts to expand tax surveillance of foreigners working in Bangladesh are unlikely to show results until next year, said Ghulam Hussain, chairman of the National Board of Revenue (NBR).
Tax evasion is a key issue in Bangladesh’s all-important, foreign investment-driven garment sector, which draws white collar workers from India, Pakistan, China, Korea, Sri Lanka, and other countries, reports Monitor Global Outlook.
Some of them open up buying houses – intermediaries between Western clothing brands and Bangladeshi suppliers.
They also work in export processing zones, hospitals, and the telecom and hotel and tourism industries.
The Special Branch, the intelligence wing of the police, estimates that there are about 200,000 foreigners residing in Bangladesh, but according to the Board of Investment and the Bangladesh Export Processing Zone Authority, only 10,000 valid work permits have been granted to foreigners.
Bangladesh’s current year budget includes measures to streamline revenue collection processes and procedures.
As part of an effort widen the tax net, NBR asked officials to intensify surveillance initiatives targeting foreigners evading taxes, local media has reported.
Hussain, however, said that “it is part of our routine work.”
Poor monitoring and enforcement of tax regulations cost the country vital income tax revenue.
“There is a big gap in general in the tax revenue [compared to the working population],” said Hussain.
“When a large number of taxpayers are not paying taxes, it takes longer to identify them.”
Bangladeshi laws require foreigners to pay 25 percent income tax, but “it is difficult to identify if someone engages into work while they are in the country on tourist visas,” Mohammad Alauddin, a member of the tax monitoring team at the NBR, told the MGO.
The proposed national budget for 2014-15 has an income tax revenue target of $3 billion, 13 percent of the total revenue target of $23.5 billion.
BBN/AS-18June14-1:10pm (BST)
