Finance minister AHM Mustafa Kamal has said that the foreign companies will be required to have local partners for doing business in Bangladesh as the government wants to bring them under the tax net.
‘No foreign company can do business alone here any longer,’ he told reporters on Thursday after a meeting of the national coordination committee on anti-money laundering at the secretariat.
Since 2018, the transfer pricing cell of the National Board of Revenue has been functioning to check ‘transfer mispricing’ that, according to the Customs, is a way to evade tax by multi-national companies.
Commenting on the transfer pricing cell, Mustafa Kamal said that despite the presence of this cell or whatever other mechanisms were there the NBR did not get any revenue from the companies entirely-owned by foreigners.
From now on, the companies owned by foreigners would need local partners, he said, adding that the step would ensure that at least a portion of the revenue of the companies would come as tax.
Officials attended the meeting said Mustafa Kamal also directed the NBR to see whether private parties could be engaged to check under-invoicing and over-invoicing.
The issue of frequently using under-invoicing and over-invoicing to smuggle out money from the country was widely discussed in the meeting attended by high officials from the Bangladesh Bank, the Finance Division, the Financial Institutions Division and the ministry of law.
The finance minister also directed the authorities concerned to seek opinions from the relevant ministries and divisions before finalising the three-year national strategic plans on money laundering and terror financing.
Musfata Kamal told reporters that the capital flight from the country took place mainly ‘through banks and the NBR’.
Plans are underway to introduce companies like pre-shipment inspection to check the over- and under-invoicing.
He warned that dishonest companies involved in the capital flights would face tough actions.
Both financial penalties and other punitive measures would be taken against them, he said.
He had earlier announced that a dozen of container scanners would be set up to bring all the exports from and imports to the country under a modern surveillance system, added the finance minister.
He emphasised that scanning of both the exports and the imports would help to plug loopholes in alleged under- and over-invoicing.
Washington-based Global Financial Integrity in its report on illicit capital outflow, released in January, said that $5.9 billion or about Tk 50,000 crore was siphoned off from Bangladesh in 2015 alone.
The global research organisation calculated that Bangladesh suffered a loss of $81.74 billion in 11 years since 2005 as money was siphoned off mostly through over-invoicing of imports and under-invoicing of exports.
The previous meeting of the national coordination committee on anti-money laundering was held in Mach 2018.
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