The proposed budgetary provision for legalizing undisclosed money by paying only 15% income tax might encourage taxpayers to dodge tax and wait until they are eligible to only pay 15% to whiten black money.
Speakers at a post-budget press conference organized by the International Business Forum of Bangladesh (IBFB) at its office in the capital on Tuesday made the observation.
They were also of the opinion that the proposed tax amnesty would contribute to the creation of inequalities among the businesses that enter the economy with varied tax rates.
IBFB President Humayun Rashid chaired the conference while the forum’s immediate past president Hafizur Rahman Khan, Vice-President Lutfunnisa Saudia Khan and Adviser Dr Muhammad Abdul Mazid were present, among others.
Responding to queries from journalists, Dr Abdul Mazid said the opportunities for a country’s citizens to legalize undisclosed money were a universal practice because such wealth might be accumulated for various reasons.
The idea of undisclosed money should have been made clearer in the (budget) speech, he said, adding that it might hurt regular taxpayers.
He also said undisclosed money should be brought to the formal economy through proper legal process.
“However misuse of the amnesty might discourage new taxpayers from coming under the tax net,” he said.
Responding to another query, the IBFB president said the Bangladesh economy has been affected by different global factors including the Russia-Ukraine war, higher freight costs, and global supply chain disruption.
“Yet the businesses cannot sit idle here in Bangladesh,” he said and added the size of the budget for the next fiscal year has not been increased much compared to that of last year.
Identifying corruption as a major challenge for the country, he said it seriously affects the ease of doing business.
“As businesses are interrupted, investors are not coming in and employment is not being generated,” he said.
The proposed budget is devoid of timely reform guidelines, he added.
He also said good governance and proper monitoring are needed to face the challenges of budget implementation while collaboration between the public and private sectors should be strengthened.
In its budget analysis, the IBFB said it is necessary to withdraw 1% customs duty (CD) at the import level on raw materials.
The IBFB also called for providing for tax exemption on completely built unit (CBU) electric vehicles until 2030 aiming to promote environment-friendly cars in the country.
