The government is likely to include the facility of legalising undisclosed money in the FY2014-15 budget bowing to the pressure of influential black money owners, official sources said.
The proposed budget which awaits parliamentary passage this month might add that the black money can be whitened paying different taxes including 10% penalty and invested in any productive sector.
Besides, a provision in the current budget about investing black money on three specific sectors may be discontinued, according to the Finance Division officials.
The provision states the undisclosed money can be invested in three sectors - real estate and housing, treasury bonds and any productive sector - paying 10% penalty tax. No other additional taxes need not to be paid.
In the post-budget press conference, Finance Minister AMA Muhith, however, categorically ruled out the possibility of keeping the whitening facility in next fiscal.
“The whitened money did not have that much impact on the economy as only a little amount of Tk340 crore was legalised in FY2012-13,” he said.
“In last two years, nothing much was invested availing of the opportunity. In the last fiscal year, the government received Tk34 crore as tax on the money whitened,” he said, adding the opportunity will not be continued from the fiscal year.
The minister, in his budget speech and the finance bill 2014, did not mention anything about whether the opportunity will continue or not.
“As it was not mentioned in the documents, it will not continue. I will incorporate the matter with law,” he said at the press conference.
Article 19E of the income tax ordinance said the untaxed money can be invested in income generating sectors such as industrial enterprises, balancing, modernisation, renovation and extension of an existing industry, building, apartment, land, securities listed with stock exchanges and any trade, commercial and industrial venture engaged in production of goods and services.
According to the Global Financial Integrity Report 2013, during 2009-2013, more than Tk2,098 crore was whitened in Bangladesh, against which the National Board of Revenue (NBR) received only Tk279 crore in taxes.
During the July-April period of the current fiscal year, Tk234 crore was whitened in different income generating sectors, according to data compiled by the NBR.
The minister also said there are other ways to trace how people generated black money.
“Land is the largest source of investing black money as a huge amount of money every year is being invested here. We need to think on how to remove the money and that will need discussion,” he said.