The government will not allow any scope for whitening black money in the upcoming budget, Finance Minister AMA Muhith has said.
Muhith made the remark at the 35th meeting of the National Consultative Committee of the National Board of Revenue at a city hotel yesterday.
As he was leaving the venue after delivering his speech, when the journalists asked him the reason for the sudden decision, the minister said he was ill and would not answer any question.
Muhith has always been known for being in favour of allowing opportunities to whiten the so-called black money that exist in the economy.
During FY2013-14, the government allowed legalising undisclosed money by investing in the real estate sector through payment of a 10% penal tax, in addition to normal taxes.
According to the Global Financial Integrity Report 2013, from 2009-2013, more than Tk2,098 crore was whitened in Bangladesh, against which the NBR received Tk279.29 crore in taxes.
From 1971-2013, nearly Tk13,809 crore was legalised, against which the NBR received only over Tk1,455 crore in taxes, the report said.
However, a few days ago, NBR Chairman Md Ghulam Hussain observed that conditions for allowing undisclosed money should be relaxed for promoting new industries and also to prevent money laundering.
“Many developed countries have moved far ahead in terms of financial and social development, by just allowing undisclosed money in investments with trouble-free conditions,” the NBR chief said.
“Wealthy people are now busy siphoning off black money abroad. That money could have been used for developing industries in the country,” he said.
Continuation of the scope for whitening black money by investing in the housing sector is one of the core demands from the Real Estate and Housing Association of Bangladesh.
REHAB General Secretary Md Wahiduzzaman said the opportunity should be continued for a while for the sector to enjoy the fruits of investment.
He also suggested that the government should start supporting buyers through easy re-financing of housing loans if it finally decided
to withdraw the whitening facility.
Tax-free income ceiling
This year, FBCCI demanded that the government increased the tax-free income ceiling to Tk2.5 lakh from the existing Tk2.20 lakh.
However, during yesterday’s meeting, Muhith advised the apex trade body of the country to “not expect too much from him.”
The minister said he would consult with the prime minister and fix the ceiling for the next 10 years but hinted that there might not be any drastic change.