The Real Estate and Housing Association of Bangladesh (Rehab) has demanded an opportunity to invest undeclared money (black money) in the country's housing sector without any questions by paying less tax. However, the National Board of Revenue (NBR) has rejected this proposal outright.
Rehab presented this proposal at the pre-budget discussion held in Agargaon in the capital on Wednesday (April 8).
In the discussion, the organization's president Md Wahiduzzaman and vice-president Liaquat Ali Bhuiyan highlighted the current situation and crisis in the housing sector.
Rehab's written proposal said that it is necessary to reinstate a provision in the Income Tax Ordinance so that no authority can raise questions about the source of money in the purchase of flats.
According to the organization, this will increase investment in the housing sector with undeclared money and revive the sector after overcoming stagnation.
In this regard, Rehab Vice President Liaquat Ali Bhuiyan said that many expatriates do not officially declare money even when they send it abroad. As a result, that money is considered undeclared. If there is no opportunity to buy a flat with that money, it remains abroad or goes to other sectors.
However, opposing this proposal, NBR chairman Abdur Rahman Khan said: “We have been in such a culture for a long time. Now there is no opportunity to walk that path.”
He said that currently it is easy to send money from abroad through legal channels and the government is also providing incentives for expatriate income.
Therefore, expatriates will legalize the money by paying taxes regularly—no special privileges will be given beyond this.
Incidentally, in FY21, the then-government introduced a special provision through which no organization could question the source of undeclared money invested in the housing sector.
At that time, where a maximum tax of 30% percent was applicable to buying a flat from ordinary income, the tax on black money investment was only 10% .
However, this policy faced widespread criticism and was gradually withdrawn by the government later.
Currently, there is no special tax benefit for investing undeclared money in the housing sector. Rather, in addition to paying regular taxes, penalties are also applicable if necessary.
At the same time, the Anti-Corruption Commission and other relevant agencies may raise questions about the source of the investment money.
In addition, in the pre-budget discussion, Rehab has also proposed reducing the registration fee for buying and selling flats or apartments, developing a secondary market in the housing sector, and providing some other policy support to encourage investment.