Staff Correspondent

Foreign executives of NGOs operating in Bangladesh are using concealed salary structures to evade taxes and launder money abroad, revealed a media report.

This malpractice raises concerns over regulatory lapses, particularly in NGOs overseen by the NGO Affairs Bureau.

Among the cases uncovered, Pankaj Kumar, an Indian citizen serving as the Country Director of Germany-based NGO Welthungerhilfe, earns €7,500 monthly. However, his declared income to the National Board of Revenue (NBR) is only BDT 190,000 (€1,500), on which he pays Tk20,146 in tax. The remaining amount is reportedly remitted to his home country. Between 2019 and 2023, Kumar also worked for NGOs such as Swiss Solidarity, Saferworld, and Christian Aid, using similar practices.

The widespread malpractices by the foreign nationals working in different NGOs in Bangladesh were revealed in a report published on Bangla daily ‘Jugantor’ on Thursday.

According to the report, out of 274 foreign NGOs currently operating in Bangladesh, their country directors, mostly foreign nationals, declare only a fraction of their actual salaries for tax purposes. This practice allows them to secure work permits while transferring substantial portions of their salaries abroad. The NGO Affairs Bureau, despite being aware of these discrepancies, has taken no substantial action.

Regulatory Oversight and Challenges

When asked, Anwar Hossain, acting director-general of the NGO Affairs Bureau, stated that foreign NGOs operate using their own funds, and salary declarations made during work permit applications are not always consistent with international salary standards. The bureau primarily ensures taxes are paid on declared salaries. However, instances of tax evasion indicate a lack of stringent verification mechanisms.

The issue extends beyond NGOs. Foreign professionals in the private sector are also implicated. In one instance, a Chinese executive working for a local company was found to have transferred significant funds abroad while underreporting their salary in their work permit.

NBR Chairman Abdur Rahman Khan acknowledged these issues, noting plans for automation to strengthen tax compliance among foreign workers. Currently, tax clearance is verified at airports for foreign nationals leaving the country.

These revelations underscore the need for stricter oversight and collaboration among regulatory bodies to address tax evasion and ensure transparency in salary declarations.