The Financial Express

Over 3,000 Bangladeshis legalise black money amounting to Tk 3.81b

| Updated: December 01, 2020 14:47:21

Evaly and Fianancial Express Evaly and Fianancial Express
Over 3,000 Bangladeshis legalise black money amounting to Tk 3.81b

Some 3,220 people whitened their undisclosed income by investing in movable and immovable properties between July 01 and November 29 period of the current fiscal year (FY).

They have legalised their undisclosed money making use of a provision incorporated in the national budget for FY 2020-21.

The National Board of Revenue (NBR) has received Tk3.81 billion taxes against the funds disclosed by individuals. The money was shown as investment in land, building, cash, bank deposits and other financial instruments.

According to the NBR data, some 138 people also invested their undisclosed money in the share market, paying Tk 188.4 million taxes until November 29, 2020.

Talking to the FE, a senior tax official said the disclosure has not been as per expectation of the NBR as many people do not have a clear idea about the opportunity.

Mainly large taxpayers who file tax returns with the help of their tax consultants avail the opportunity, he said, adding that those taxpayers usually file time petitions, seeking more time to submit their returns.

"We are hopeful that both number of individuals and disclosed amount would increase significantly within two or three months," he said.

For investment of undisclosed money in the capital market, the income tax wing specified six conditions.

They include: (a) investment should be made from July 1, 2020 to June 30, 2021 (both days included); (b) taxes have to be paid within 30 days of investment and (c) a declaration paper in IT2020 form will have to be submitted to the deputy commissioner of taxes on investment.

In case of withdrawal of investment within one year from the capital market, the income of taxpayers will be considered as 'other income' and tax would be imposed at a regular rate on the amount.

The opportunity will not be valid in case of any proceedings on tax evasion or other financial irregularities which begin on the day of investment or before that.

According to a NBR circular, undisclosed money holders will have to pay tax before submission of returns or revised returns.

In the budget for the current FY, the NBR has offered an opportunity on a wholesale basis to disclose undeclared income anywhere in the form of cash, deposit, investing in securities, land, apartments etc.

Under the opportunity, no taxmen will raise any question on source of declared money of taxpayers.

The taxpayers can legalise the money by paying 10 per cent tax at a flat rate.

However, there are separate tax rates on per square metre on the value of the properties for the investors who will invest in land, flats or housing properties.

According to the income tax circular, the owners of land, apartments and buildings do not require to submit declaration paper after payment of taxes to show their undisclosed properties.

But they have to give an explanation in 'other receipts' section in income tax returns. On a case-to-case basis, they have to submit bank statements, and documents as evidence.

They will not be allowed to pay tax at flat 10 per cent showing the value of land, apartments or buildings as their undisclosed money.

In case of disclosure of cash, undisclosed money holders will be able to declare 'cash in hand, cash in bank or working capital in businesses.'

There is another opportunity on voluntary disclosure of income which also drew a poor response.

In the FY 2018-19, some 85 people availed the facility. They legalised a sum worth Tk 1.26 billion by paying Tk 130 million in income tax.

In the FY 2017-18, some 90 people availed the facility while the number was 48 in the FY 2016-17.

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