Foreigners in duty-free car scam

A good number of foreign nationals working with major international organisations based in Bangladesh over the years misused the facility to import luxury cars free of tax, official records suggest.

While leaving Bangladesh, they sold those cars to Bangladeshi nationals, depriving the state coffer millions in taxes, according to officials of National Board of Revenue (NBR).

Most of these foreigners worked for organisations such as the World Bank (WB), the Asian Development Bank (ADB), the United States Agency for International Development (USAID), the UK's Department for International Development (DFID), Japan International Cooperation Agency (JICA), the United Nations Children's Fund (UNICEF) and the United Nations Development Programme (UNDP), according to the NBR.

The tax authorities managed to identify 395 such defaulters in a special investigation spanning three months.

As per law, foreign nationals of different development organisations working in Bangladesh may import cars without tax, provided they would take it back at the end of their stay. A passbook is issued against their name to keep track.

But if they opt to sell the vehicle, the buyer has to pay the tax. The orgainsations they work for may also put those vehicles on auction, but whoever buys it has to pay the tax in full as well, according to rules.

Usually foreign nationals working in Bangladesh buy jeeps and these vehicles have yellow number plates.

The NBR findings reveal that the World Bank's senior officials have misused this facility the most. Vehicles brought by as many as 53 of former WB staff are missing. Some have been sold to Bangladeshi nationals as well.

The UNDP has 48 of such defaulters while the JICA has 41, the UNICEF 23, the DFID 18, the Food and Agriculture Organisation (FAO) 17 and the World Health Organisation (WHO) 12.

Stephen Presner was the country director of the UNDP in Bangladesh from 2008 to 2012. He used a Mitsubishi pajero that is worth about Tk 10 million and he did not have to pay 596 per cent tax, unlike the requirement of others. But before leaving the country he sold the vehicle to one Ashikul Hasib. The Customs Intelligence and Investigation Directorate seized the car on 28 November.

Christina Kimes came to Bangladesh in 2012 to work in a senior position for the World Bank. She was also the acting country director for a while. Her passbook expired on 31 December last year, but she did not surrender it to the NBR. There is no news of whereabouts of the vehicle she imported either.

Sanjay Kathuria, the former chief economist of the World Bank Dhaka Office, has done the same thing. Before leaving the country in 2014, he did not submit the passbook issued against the car he imported without tax. Salman Zaidi, another former chief economist of the WB, has also left Bangladesh using a vehicle imported without tax. And there are no news of the car.

When the World Bank Dhaka Office was contacted over e-mail, they said they are yet to get any documents from the NBR and they won't say anything without seeing the papers.

The UNDP Dhaka Office also did not reply till Tuesday.

NBR chairman Nojibur Rahman said the organisations are still functioning in Bangladesh although those staff have left the country. "Their top bosses have been contacted and soon a solution will be reached," he hoped.

"Bangladeshi nationals who have bought those cars will also be identified. They have to pay the full tax or face legal action," he added.

NBR officials said they would soon serve the organisations show cause notice.

The article originally published in Prothom Alo print edition is rewritten in English by Quamrul Hassan