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The Financial Express

Anti-graft body asks taxmen to probe legalising black money

| Updated: February 12, 2021 10:28:44


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The Anti-Corruption Commission (ACC) has warned the taxmen against black money accumulation by some people, showing income from fake fish, poultry and dairy farms or other businesses relating to stock of goods.

On several occasions, the watchdog found that a number of individuals, including salaried persons, showed such income in their tax returns.

However, the ACC teams did not find any existence of such business or income of those persons while conducting physical or spot investigation.

The ACC secretary Dr Md Anwar Hossain Hawlader expressed his concern over this issue in a recent letter to the NBR chairman Abu Hena Md Rahmatul Muneem.

"If the taxmen accept those incomes on wholesale basis, scope of legalising black money would be created," he wrote in the letter.

The ACC suggested the NBR to conduct scrutiny on logical ground to assess whether those shown incomes really exist or not.

The taxmen should verify before accepting such incomes in those sectors, he added.

Talking to the FE, Dr Hawlader said there are some salaried persons who have long been showing such incomes in the name of their family members or persons dependent on them.

The taxmen should verify the incomes before accepting those, as it could be a strategy of tax evasion.

The letter to the NBR has been sent following instruction of the ACC chairman, he noted.

A senior tax official said the fish farm owners are enjoying a reduced tax facility as per the Income Tax Ordinance (ITO).

The taxmen can identify these people by cross-checking their tax returns or sending inspectors on spot for investigation, as they do not have any documents.

A section of people, including the government officials, show fake businesses in the name of their spouses, children or other family members, since they cannot show other incomes beyond their salary.

The tax official added that some people are also taking advantage of capital benefit for start-up businesses as per the ITO to create assets and legalise their income.

People involved in fish farming business can enjoy tax exemption of up to Tk 1.0 million, and tax rate for next Tk 1.0 million is 5.0 per cent.

Officials said the ACC, in February 2020, also raised the issue, saying that a section of people were legalising their income by showing fake fish farms and other businesses.

In June 2020, the Fish Farm Owners Association Bangladesh (FOAB) also sent a letter to the NBR, requesting it to check the abuse of reduced tax rate facility in (the name of) fish farms. Molla Shamsur Rahman, president of the association, said a section of politicians are abusing the facility to legalise their black money.

The NBR should amend its policy to help the genuine farmers avail the facility.

"There should be a provision for identifying the genuine fish farmers. The government might make it mandatory for them to obtain licence from the Department of Fisheries."

The government first offered the tax benefit for fish and poultry farm owners in 2013. Later, it scrapped the facility in 2015 following abuse of the facility.

The NBR reinstated the concessionary tax rate in July 2015 following pressure of some influential quarters.

In its letter, the FOAB suggested the NBR to impose a number of conditions for availing the benefit, including providing a number of documents such as trade licence, ownership, lease of land, pond or fishing ground, and licence for fishing ground and hatchery.

Currently, the taxpayers do not require submitting any effective document or evidence against income from these sectors.

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