Cost to Bangladesh Tk4,500cr yearly

Illegal employment of foreigners, and their rampant malpractice of tax evasion, is depriving Bangladesh of at least Tk 4,500 crore in revenue annually, reveals documents from the Bangladesh Financial Intelligence Unit (BFIU).

BFIU points out that foreign nationals working illegally in Bangladesh earn a significant sum of money per year, but they do not pay taxes, which is very dangerous for the country’s economy.

The figure was found in a meeting minutes from the 18th meeting of the Central Task Force on Prevention of Money Laundering and terrorism financing, held virtually last week and presided over by the BFIU chief Masud Biswas.

According to the document, 1.21 lakh foreigners had stayed in Bangladesh till September 9. Among them, 52 per cent or 63,081 foreign nationals had arrived through four types of visas – Expert or Consultancy, Business, Tourist and visa on arrival (VOA).

It should be noted that Bangladesh has 37 types of visa for foreign nationals. The BFIU document said Chinese nationals, arriving through Business visas and VOA, are involved in various projects and other economic activities.

A significant number of foreigners coming under student visa are from Nigeria and Somalia, and they are getting involved with the readymade garment (RMG) industry, club football illegally.

Addressing the issue, former chief economist of World Bank Dhaka Office Zahid Hussain said, “There is a huge deficit of skilled and technical manpower in our industrial and services sectors. Institutions such as the garment industry and hospitals prefer hiring experts from abroad.

“This is why foreigners take the opportunity to get involved. The government and the authorities concerned should make the regulations stricter so that foreigners cannot stay and work in Bangladesh informally.”

He continued, “It would be difficult for the government to halt this outflow of remittance, so the regulatory bodies will have to smooth out the rules regarding foreigners’ income repatriation. This will help Bangladesh tax the foreigners’ income more easily.

Representatives of different organisations, including police units, Bangladesh Securities and Exchange Commission, Insurance Development and Regulatory Authority (IDRA) and other members of the BFIU task force attended that meeting. According to the meeting minutes, the BFIU has taken a number of initiatives to tackle the digital hundi system. The anti-money laundering agency already forwarded details of 5,766 mobile financial service (MFS) agent accounts to the law enforcement agency.

Authorities so far have arrested 22 people in five cases related to the digital hundi.