Finance Minister AMA Muhith proposed the penalty in his budget speech for FY 2015-16 in Parliament on Thursday.
He also proposed withdrawal of all tax exemptions granted to the institution if the offence is proved.
He said in his budget speech that any establishment ‘illegally’ employing foreign nationals would be made to pay extra duty.
Muhith proposed a fine of 50 percent of its income tax payments or Tk 500,000, whichever is higher.
Many foreign nationals worked in Bangladesh without paying tax, he said, while a large number of youths remained unemployed.
“We began registering foreign citizens working here last year. This year, we have proposed regular tax on them.”
The finance minister also proposed jail sentence and fine as penalty for foreigners evading tax.
