The Financial Express

Money whitening new bait : Bangladeshi passport holders can avail with penal tax

Provision coming in next finance bill with budget

| Updated: May 23, 2022 17:56:36

Money whitening new bait : Bangladeshi passport holders can avail with penal tax

The government envisages fresh baits for repatriating siphoned-off money with a budgetary measure allowing Bangladeshi-passport holders to get their 'black money' whitened with penal tax.

The new measure, first of its kind, may be incorporated into the Finance Bill 2022, to be placed before in parliament on June 9.

Sources concerned say a flat rate of penal tax might be applicable to whitening the money and it will be shown in the tax file of the undisclosed-money holders.

Bangladeshi-passport holders would be able to get their income legalised without facing any question and bring back their money under the provisions, they add.

In the upcoming budget, the National Board of Revenue (NBR) would slash corporate-tax rates for both listed and non-listed companies to facilitate businesses and boost investment amid the slowdown in economic activity and investment.

The tax measures would be placed with the Ministry of Finance (MoF) for final approval of today (Monday), officials said.

However, tax-free ceiling for individual taxpayers may remain unchanged despite erosion of real income of people due to price spiral of essential commodities.

Currently, tax-free threshold for individual taxpayers is Tk 0.3 million.

The ceiling was revised upward in FY 2020-21 after five years.

In the upcoming budget for FY 2022-23, the government may keep it unchanged as upward revision of the limit results in dropout of many existing taxpayers.

The government considers the existing limit consistent with the per-capita income and economic growth.

The tax rates range from minimum 5 per cent to the highest 25 per cent for individual taxpayers is likely to be unchanged.

Currently, corporate tax is 30 per cent for non-listed companies and 22.5 per cent for listed ones.

However, the rates of corporate income tax for banks, mobile operators, tobacco companies and other sectors may remain unchanged.

Currently, corporate income tax rate is 37.5 per cent for banks, insurance and other financial institutions that are listed on the capital market, 40 per cent for non-listed banks, 37.5 per cent for merchant banks, 45 per cent for tobacco companies, 45 per cent for non-listed mobile-phone operators and 40 per cent for listed mobile-phone operators, 15 per cent for cooperative entities and 12 per cent for export-oriented readymade garment factories.

According to Tax Justice Network global Report, Bangladesh loses more than $144 million in tax revenue a year mainly due to corporate- tax abuse and offshore tax evasion.

Of the amount, corporate-tax abuse by multinational corporations causes annual tax losses worth $118 million and individual offshore tax evasion is responsible for the remaining $26 million loss in taxes.

According the Global Financial Integrity report, released in January 2019, the illicit capital outflow went unabated as $5.9 billion was siphoned from Bangladesh in 2015 and a total of $81.74 billion from 2006 to 2016.

"Following growing concern over capital flight from the country and search for ways out to bring back the money, the new measure has been incorporated into the budget," says one source.

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