Work Permit Visa: The Impact of Hiring Unauthorized Foreign Workers in Bangladesh

"Responsible Hiring in Bangladesh: Navigating the Consequences of Unauthorized Foreign Workers, Legal Compliance Matters"

Many of the foreign nationals are working in the country without taking prior permission from the Bangladesh Investment Development Authority (BIDA) and other appropriate authorities appointed by the government. They are carrying various types of visas like A3, tourist, business, visa on arrival, and blank, thus remaining out of the purview of the income tax net,

According to a study of the Transparency International Bangladesh (TIB), conducted in 2019, the majority of an estimated 250,000 foreign nationals from 44 countries working mostly in private sector entities are employed without a mandatory appropriate visa and work permit, although the actual number is closer to 1 million. The illegal foreigners are transferring an estimated $3.15 billion annually. As a result, the country loses at least $1.35 billion in revenue per annum due to tax evasion. Interestingly, only 14,000 of these foreign workers paid off Income Tax in 2020. 

Local Work Visa Consultant in Bangladesh:

Most of the companies are searching for professional service providers who can take care of the full process smoothly, however, not getting professional Consultant/Lawyer/Solicitors despite of paying higher consultancy fees+ extra miscellaneous costs ranging from 24,000 to 32,000 Taka (source-TIB) during the process such as Visa collection, work permit, visa extension, security clearance (SB & NSI), tax, and WP cancellation, however getting disappointed year after year.

 Why should the foreign workers pay Income Taxes?

Well, every foreigner working here is required by law to pay income taxes. In order to work legally, a work permit is must, and working without one is considered illegal and can lead to serious consequences.

What is the Penalty as per Law?

To address this issue, the Bangladesh government has enacted laws to combat the unauthorized employment of foreign workers.

• As per Section 16 (B) of the Income Tax Ordinance 1984, which mentions that employers of the foreign nationals, having no work permit from BIDA, shall be charged additional tax at the rate of 50 per cent or the tax payable on his income or Tk 0.5 million whichever is higher in addition to tax payable under the ordinance.
•  Moreover, section 165© of the ordinance which states that an employer guilty of an offence for unauthorized employment of foreigners can be jailed for three (3) years and fined Tk 0.5 million.

What should you do as an expatriate employee in Bangladesh?

As an expatriate employee in Bangladesh, you should obtain a Valid Work Permit, Comply with Visa Regulation, Adhere to Tax Law, Choose Reputable Employers and Seek Legal Advice, etc.

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