Non-EPZ firms can pay foreign staffers in dollars

[source: The Business Standard] The government is going to allow firms outside of the Export Processing Zone (EPZ) to pay their foreign employees in dollars. This has been a long-standing demand of companies and would make the revenue board better able to tax the foreigners.

The approval will enable the export oriented non-EPZ companies to pay the foreign employees via their foreign currency (FC) accounts from the company export retention quota (ERQ) account. The central bank will issue a circular in this regard this week.

People concerned said the government is going to take the decision for two main reasons. These are that foreigners shy away from the non-EPZ companies as they pay salaries in local currency and in cash; plus payments in local currency and cash-in-hand deter the National Board of Revenue (NBR) from taxing the foreign staffers.

Factories currently located in the EPZs can pay their foreign workers via FC accounts while firms outside the EPZ have to pay salaries in taka, an official of the Bangladesh Bank’s Foreign Exchange Policy Department told The Business Standard.

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