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25 August, 2019 00:00 00 AM
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Illegally staying foreigners cost the country a lot

Employment of foreign nationals should only be considered for the job for which local experts or technicians are not available
PROF. SARWAR MD. SAIFULLAH KHALED
Illegally staying foreigners cost the country a lot

According to a document prepared by the Bangladesh Investment Development Authority (BIDA) previously known as Board of Investment (BoI) and Privatization Commission, over 700,000 unauthorised foreigners have been living in Bangladesh since long. Reports have it that although there are local experts and skilled hands in the country the BIDA issues work permits to foreigners violating rules. The BIDA is continuing such illegal practice for which the local job seekers are being deprived, amid repeated protests from different quarters. Only around 12,000 foreigners, out of these huge illegal outsiders, are listed with the National Board of Revenue (NBR), who pays taxes on regular basis. As a result around US $4 billion or Tk 320 billion is being drained out of the country a year, and the national exchequer loses Tk 4 billion a year.

These foreigners are employed mostly in productive sectors in various important positions of various private installations and establishments, from managers to general workers. The NBR has already started a drive from the first day of the fiscal year (2015-2016) to realize taxes from the foreigners working here, as the government insists on widening tax net. According to NBR, as per rule, a working foreigner having work permit has to pay 25 to 30 percent of his or her income as tax. But no tax can be collected from those who have no work permit. The foreigners, however, are working in Bangladesh with various categories of visa. Although around 12,000 have valid work permits and are paying taxes, a huge number of foreigners who are working in various capacities with valid work permits pay no taxes at all causing colossal loses to the national exchequer.

As part of widening the tax net process, the NBR has sent letters to different local and foreign offices requesting them to inform the tax administration of how many foreign nationals are working with them. The NBR field level officials have been instructed to strictly follow the Section 107 of Income Tax Act, 1984. This Act makes submission of a tax clearance certificate to the Immigration Office for a working foreigner's mandatory before his or her departure from the country. The Section 107 also made it clear that the foreigner concerned should not leave Bangladesh without obtaining a release letter about tax payment. Officials pointed out that the highest amount of taxes are supposed to be collected from foreigners from five circles – three from Dhaka and two from Chittagong and Khulna.

A survey revealed that the authorities concerned like BIDA, Bangladesh Chemical Industries Corporation (BCIC), Bangladesh Export Processing Zones Authority (BEPZA), Special Economic Zones Authority (SEZA), Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers & Exporters Association (BKMEA) and the National Board of Revenue (NBR) have no list of the foreigners working in Bangladesh. Moreover, foreigners are working in various composite textile mills, buying houses, merchandise companies, rental and quick rental power stations, international construction companies, fashion houses, food producing firms, marketing organisations, mobile phone companies, leather and leather goods manufacturing companies, spinning mills, medicine manufacturers, ad firms, NGOs, missionary offices, show rooms and others organizations. These organisations have failed to register those people, although prior permission from relevant organisations is needed for the foreigners to work in this country.

Such illegal foreigners who are employed in high paid key positions in various establishments showing them as skilled workforce are mostly from India, Sri Lanka, Japan, Korea, Africa, European Union and China. Officials at the apparel sector's apex trade body, BGMEA, has claimed that lion's share of these foreigners are working in the readymade garment (RMG) sector. Local experts criticising the non-registration of the working foreigners, maintain that such illegal workers should be identified on priority basis and actions be taken thereof.  To get out of this problem priority should also be given to train up local work forces to replace the foreign nationals. Once the country has sufficient trained and skilled workforce, there would be no need or room for employment of foreigners.

The BIDA rules say, "Employment of foreign nationals is normally considered for the job for which local experts or technicians are not available”. Official statistics show, the BIDA has issued around 12,000 work permits so far to foreign nationals coming from India, Sri Lanka, Pakistan and some other western countries. Chief executives of different logistics service providers, export-oriented readymade garments industry, private sector power generating companies said the BIDA is violating its rules in issuing work permits to foreign nationals. They said "Despite having local experts and skilled manpower, a good number of foreign nationals are occupying many jobs and getting salaries higher than the local employees". They further alleged that BIDA does not scrutinise the applications, seeking work permits by different export-oriented industries and service providers.

Thus over US $5 billion drain out every year from the country as at least 100,000 foreigners are working in the service sector. Contacted, a senior BIDA official, seeking anonymity said they are always against issuance of work permits to foreign nationals who are capturing the jobs of local experts and technicians. In many cases, he said, "We have to succumb to the pressure by some influential businesses who want to employ foreigners to boost exports”. Protesting issuance of work permits to foreigners, Bangladesh Freight Forwarders Association (BAFFA) has brought the issue to the notices of different concerned government agencies and also sent letters to different government bodies, seeking an end to such practice.  

The NBR alleged that most of the foreign nationals do not have tax files and they remit their income without paying taxes to the government. Sources in the BGMEA, BKMEA and Bangladesh Textiles Mills Association (BTMA) said that at least 25,000 Indian, Pakistani, Sri Lankan, Chinese, Korean and Filipino nationals are working in export-oriented readymade garment and textile sectors. A former president of American Chamber of Commerce and Foreign Investors' Chamber of Commerce and Industry said Bangladesh's higher educational system should be redesigned to cater to the textile, garment and service sectors. He, however, urged BIDA to be cautious in issuing work permits to foreigners depriving local professionals. He said local operations of British Standard Chartered Bank and American Citibank NA are being successfully and profitably run by Bangladeshis.

The World Bank (WB) and the International Labour Organisation (ILO) reports said that Bangladesh's youth unemployment is the highest in South Asia. Recent reports by the WB and the ILO indicate that 41 per cent of young people do not work, do not study and do not train. The situation is even worse for young women.

Bangladesh's population under 30 years of age makes up 60 percent of the total labour force. In 2013, the youth unemployment rate in Bangladesh was 10.3 percent, higher than the regional South Asian average of 9.45 percent. Absence of quality education and skills is the main reason. Many firms have to hire foreigners. Unemployment and crime are closely linked. It is reported that Bangladesh stands 5th among the 15 nations sending remittances to India after UAE, USA, Saudi Arabia and UK. In 2013, remittance from Bangladesh to India was about US $ 3.716 billion, the amount has increased much more by now.

Meanwhile, BAFFA has urged the government to take necessary steps to keep interest of Bangladeshi nationals working in the freight forwarding sector and not to issue work permit to foreign nationals for working in the sector. It is learnt that neighbouring countries like India and Sri Lanka usually don't issue work permit to foreign nationals. Foreign companies like Kuehne Nagel, Expressiditor Bangladesh Limited, Maxspeed Bangladesh Limited, Marks Logistics and APL Logistics Bangladesh are being meticulously run by the Bangladeshis. Since the unemployment rate in Bangladesh is very high the association considers that BIDA should be cautious in issuing work permit to foreign nationals for working in the freight forwarding sector. Similar suggestions are also relevant for other sectors of the Bangladesh economy together with enhancing efforts for quality education and skills and employing local hands to meet at least domestic demand.    

The writer is a retired Professor of Economics, BCS General

Education Cadre

 

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Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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