Parliament passes Finance Bill

Some new fiscal measures include amnesty for 'black money', Tk 3.6mn cap on corporate cash transaction

FE REPORT | Thursday, 30 June 2022

Parliament passed Wednesday the Finance Bill 2022, with some much-debated provisions, to grant legal cover to a new national budget which critics say should have been more welfare-oriented in the crisis time than growth centric.

The new fiscal measures included amnesty for whitening offshore movable assets and a cap of Tk 3.6 million as allowable limit for cash transaction for corporate taxpayers.

In the upcoming fiscal year 2022-23, corporate taxpayers will be able to enjoy a 2.5-percent cut in tax rates if they limit cash transaction within the threshold.

Finance Minister AMH Mustafa Kamal has brought 17 amendments to the proposed budget placed on June 9, 2022, setting off flurries of talks on its different provisions.

A Bangladeshi passport-holder can repatriate any cash, bank deposits, banknotes, bank accounts, convertible securities and financial instruments by paying a 7.0-percent tax.

The government backtracks on its move to allow disclosure of immovable assets by paying 10-to 15-percent tax.

Existing special provision of whitening black money, offered in the budget for current Fiscal Year, paying higher taxes has been scrapped for FY 2022-23.

According to the proposed provision, no authority, including the income tax authority, shall raise any question as to the source of any asset located abroad if a taxpayer pays tax on such asset.

The proposed rate at 15 per cent of fair market value of assets for immovable property not repatriated to Bangladesh, 10 per cent for movable property not repatriated to Bangladesh has been scrapped in the Finance Act.

This opportunity will be in force for the period starting on the first day of July 2022 and ending on the thirtieth day of June 2023.

The tax amnesty will allow owners of such assets and cash to get into the tax compliance and avoid fines, penalties and criminal charges.

In the proposed finance law, the limit for cash transaction was set Tk 1.2 million that has been raised to Tk 3.6 million in the Finance Act 2022 following proposals of lawmakers.

The government has set a limit of single transactions for the companies at Tk 0.5 million.

The tax authority would impose penalty if it detects any offshore asset not disclosed in the tax return.

The finance minister has backtracked on his move to impose tax on workers' profit participation fund (WPPF) following demand of the corporate taxpayers after budget proposals.

Despite several request, tax-free ceiling for individual taxpayers remained unchanged at Tk 300,000.

The finance minister has also refrained from imposition of 15-percent VAT on import of lift or elevator that he proposed on June 9, 2022.

VAT on mediation has been imposed at 5.0 per cent for upcoming FY. In the proposed budget, the finance minister imposed 15 per cent VAT on the meditation services.

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