Industry

ICAB for scrapping tax, bond facilities of firms hiring foreigners illegally

The Institute of Chartered Accountants of Bangladesh (ICAB) today urged the government to impose fine, scrap tax and bond facilities of those firms which are recruiting foreign nationals without the approval of the concerned authority.

They said a huge number of foreign nationals are working in various industries and business organizations in the country while they receive a huge amount of money as salaries and allowances, but the government does not receive any tax from their income.

Rather, ICAB alleged that a huge amount of foreign currency is being siphoned off.

The leaders of the ICAB said this at a pre-budget meeting for the next fiscal year (FY22) held with the National Board of Revenue (NBR) today.

NBR Chairman Abu Hena Md Rahmatul Muneem presided over the meeting held at the NBR conference room in the city’ Segunbagicha area.

While placing its budget recommendations, ICAB president Mahmud Ul Hasan Khasru demanded of the NBR to impose specific fine as well as scrapping existing tax and bond related facilities against those firms which are hiring foreign nationals without the approval of the concerned authority.

He also suggested the NBR to keep those foreign nationals under strict vigilance who entered Bangladesh with business visa.

Proposing for incorporating a new provision in the definition of Permanent Establishment (PE), Khasru said as per the agreement on avoidance of double taxation, if any foreign firm stays more than 183 days during the implementation of a project, then it becomes a PE.

To avoid the PE, he said the foreign firms send their employees for a short term by turn so that the single stay of an employee does not cross 183 days. “By doing this, these foreign firms are evading tax.”

The ICAB proposed a total of 44 income tax related, 21 VAT related while five others customs related proposals in the budget for the next fiscal year (FY22).

The budget recommendations of the ICAB include further improving the ease of doing business index, reducing the corporate tax rate by 2.5 percent for all listed and non listed companies except the bank and financial institutions, mobile phone operator companies, tobacco manufacturing companies, amending the provision for taking central registration and existing VAT payment system.

Apart from the ICAB, the Institute of Cost and Management Accountants of Bangladesh (ICMAB), C&F, freight forwarding, tax lawyers association, the entrepreneurs of electronics and electrical, computer, ICT and telecommunications sector took part in the pre-budget meetings today.

Source: Bangladesh Sangbad Sangstha (BSS)