Black money whitening at 15pc tax blocked

Blocked now is the window of opportunity for whitening 'black money' by paying 15-percent tax at a flat rate, following widespread contentions over the scheme.

The interim government, which replaced the immediate-past regime following a student-mass uprising, made the decision Thursday amid a wind of change blowing around.

Whitening undisclosed cash, debenture, securities, bank deposits, financial schemes, instruments, any types of deposit, saving deposits and any other asset paying tax at 15 per cent would not prevail further in the current fiscal year.

For investment in securities, cash, bank deposits, financial schemes and instruments, all types of deposits, saving deposits or any other assets, tax rate was 15 per cent.

However, mainstreaming wealth by disclosing property such as land, flat by both individual and corporate taxpayers by paying a specific amount of tax may remain unchanged, officials said.

The council of advisers of the interim government made the decision in a meeting that also dealt with some more policy matters.

Dr Iftekharuzzaman, executive director of Transparency International Bangladesh, welcomes the move of the interim government as an 'expected' one as TIB has strongly recommended for.

"All of the schemes having discrimination and loopholes should be scrapped to ensure justice," he said.

Following the decision, the income-tax wing of the revenue board started to frame Statutory Regulatory Order (SRO) to scrap the facility that was approved by the past government in parliament through passing the Finance Act 2024.

In the budget for FY2024-25, corporate taxpayers, along with individual taxpayers, for the first time got the opportunity to get whitened their assets undisclosed in the income-tax files.

Under the liberty, no government authority can ask question on source of the declared money under the amnesty.

The opportunity was scheduled to expire on June 30, 2025.

According to the provision, no authority can raise any question if a taxpayer pays tax at fixed rates for immovable property like flats, apartments and land and 15-percent tax on other resources, including cash, irrespective of the existing laws of the country.

In the Finance Act 2024, the government has set a specific tax amount ranging from Tk 300 to Tk 6,000 per square metre, on the basis of areas, for individuals willing to show their undisclosed income in establishment, house, flat, apartment, floor, land.

However, tax amount would double if black money is invested in such establishments or land for any commercial purposes.

This is the first time the government has decided to scrap the money- whitening facility in the middle of the year following demand from civil society. Such schemes have been introduced at least 22 times since independence.

National Board of Revenue (NBR) data show some Tk 455.22 billion was whitened between 1972 and 2022 and the government received Tk 46.41 billion in taxes against the disclosure of the hidden wealth.

Of the amount, a record Tk 206 billion was legalised in 2020-21 mobilising Tk 20.64 billion as taxes.

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