Migrant workers hit by travel tax hike | The Daily Star
12:00 AM, July 01, 2014 / LAST MODIFIED: 01:04 PM, March 26, 2015

Migrant workers hit by travel tax hike

Migrant workers hit by travel tax hike

Sohel Parvez
 

The government has raised the travel tax in the upcoming fiscal year, a move that is set to put pressure on the financially-challenged migrant workers, who form the majority of outbound travellers from Bangladesh.
From today, travel tax for the migrant workers' popular destinations such as Middle East, Malaysia and Singapore, along with a host of other countries, will be Tk 3,000, an increase of 20 percent.
The hike comes at a time when the cost of migration is on the rise and the outflow of migrants for overseas jobs on the decline.
At present, the migration cost through private recruiting agencies stands at Tk 2-Tk 5 lakh, in contrast to Tk 1.5-Tk 2.5 lakh a couple of years ago, said industry insiders.
Ghulam Mustafa, a former president of the Bangladesh Association of International Recruiting Agencies, said the travel tax for migrant workers should be zero considering their contribution to the economy.
Migrant workers sent home $12.92 billion during the June-May period of the fiscal year
"Expatriate workers hail from low-income families—they go abroad to find better fortune. They provide a lot to the nation by sending remittances. The government should give them rewards instead of imposing higher taxes on them."
Currently, the government provides travel tax waiver for infants, cancer patients, physically challenged, foreign diplomats and their families, UN officials, cabin crew and for people going to perform hajj and umrah.


Khondaker Golam Moazzem, additional research director of the Centre for Policy Dialogue, said migrant workers are the highest foreign currency earners among all sectors, including the export-oriented industries.
"So, it is not just to levy more tax on migrant workers at a time when the government provides tax benefits to export-oriented industries."


Travellers to other destinations too would have to foot higher travel tax from today.
The travel tax for the Americas, Europe, Africa, Australia, New Zealand, China, Japan, Hong Kong, North and South Korea, Vietnam, Laos, Cambodia and Taiwan would be Tk 4,000, an increase of 33 percent; and for Saarc states, Tk 1,200, up 20 percent.

Taxes for travel by road and sea have also been raised, according to a notice by the National Board of Revenue, which aims to fetch Tk 900 crore through this channel in fiscal 2014-15. Analysts welcomed the step to increase tax to travel to developed countries but criticised the hike in tax for destinations dominated by migrant workers.
Mustafa said people's purchasing capacity has increased. "From that perspective, the rise in tax to travel for business, pleasure and medical purposes is okay."


When asked about the tax hike, a NBR official said it was raised in line with the inflation rate. "We gave many exemptions in the finance bill—the revenue has to come from somewhere."
Moazzem said it would be logical if the government reduced tax rates for migrant workers' destinations and adjust the loss in revenue by imposing more tax for travels to developed countries such as North and South America, Europe and Saarc states. The NBR received Tk 492 crore, down 2 percent year-on-year, in travel tax in July-April.
Taxmen and airline operators said the bulk of travel tax comes from migrant workers, who account for the majority of the country's international air traffic, according to aviation ministry data. Over 50 lakh travellers fly in and out of Bangladesh a year.
Overseas employment fell 32 percent year-on-year in 2013 to 409,253. Between January and May, 107,109 workers migrated abroad for jobs, according to data from the Bureau of Manpower, Employment and Training.

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