People living in municipality and district headquarters will be able to whiten undisclosed money by purchasing residential apartments in these areas, as the Finance Bill 2015 cuts specific tax on such purchases.
For this, people buying apartments with untaxed money will have to pay Tk600 as tax per square metre of the apartment area, says the finance bill. Under the existing arrangements, the tax per sq-m is Tk1,000.
The bill reduces the tax to Tk800 from the existing Tk1,500 for apartments bigger than 200sq-m.
These proposed changes, awaiting approval, have been incorporated under section 19 of the Income Tax Ordinance 1984.
The proposal says that people can legalise undisclosed money by purchasing buildings and apartments in city areas against taxes of up to Tk7,000 per sq-m.
For other areas, the bill proposes reducing the rate to Tk400 from the existing Tk700 for apartments smaller than 200sq-m. For bigger ones, the proposed bill reduces the rate to Tk600 from Tk1,000 now.
Aiming to bring undisclosed money into the economy’s mainstream, the government has for several years been allowing the legalising of undisclosed money through investment in various sectors, but without much response.
National Board of Revenue (NBR) data shows that only 2,755 people took the facility in FY2013-14 and the state coffer received just Tk44 crore in tax.
According to a 2011 study endorsed by the Finance Ministry, black money accounted for 62.75% of the GDP of 2009. In 1973, black money accounted for only 7% of GDP.
From 1971 to 2009, only Tk9,683 crore had been whitened, showed statistics compiled by the NBR.
According to the Global Financial Integrity Report 2013, more than Tk2,098 crore was whitened in Bangladesh during 2009-2013, which fetched only Tk279 crore in taxes.
In his budget speech delivered in parliament yesterday, Finance Minister AMA Muhith admitted that the NBR had not made any significant progress in combating money laundering due to legal and administrative weaknesses and capacity constraints.
But he assured that the government had taken a comprehensive plan for NBR’s capacity building.