NBR for no offshore tax amnesty in new budget

The much-discussed opportunity to bring home unreported money or assets held by Bangladeshi nationals outside the country paying 7% tax is likely to be cancelled in the forthcoming national budget, according to NBR sources.

The government's maiden offshore tax amnesty, which aimed to bring back laundered money home, has not yielded any significant results, as hardly any Bangladeshis have taken advantage of the facility, the sources added.

Economists have also voiced their support for cancelling this amnesty in the upcoming budget. Dr Ahsan H Mansur, executive director of the Policy Research Institute, commented, "There is no point in keeping this opportunity. As we have said before, no money will come through this. This is because people are looking forward to laundering money abroad. Why would they bring money back?"

The offshore tax amnesty offered in the current fiscal year's budget allowed for repatriation of cash or cash equivalents, bank deposits, bank notes, bank accounts, convertible securities, and financial instruments to Bangladesh by paying a 7% tax.

However, the move drew criticism from various quarters, including economists, who argue that it facilitates money laundering and smugglers.

Speaking to The Business Standard earlier, Transparency International Bangladesh (TIB) Executive Director Dr Iftekharuzzaman called the opportunity "totally unconstitutional, discriminatory, and encourages corruption."

As a result of the widespread criticism, the government introduced a penalty in the law for non-disclosure of offshore assets.

In 2020, as part of efforts to revive the pandemic-hit economy, Finance Minister AHM Mustafa Kamal offered an opportunity to whiten black money with a 10% tax.

By investing in the real estate sector and buying a certain amount of land depending on the area, people were given the opportunity to whiten money in return for a specific tax. The most significant change was that not only the tax authorities but also other agencies could not raise any questions about the source of the money.

The facility to whiten black money by paying 10% tax was successful in FY21, with the largest number of people whitening the highest amount of black money after independence. According to the NBR, in FY21, over Tk12,000 crore black money entered the mainstream economy, and the government received Tk.1981 crore in tax revenue from it.

However, this facility was abolished in FY22.

The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI in a consultative meeting with the NBR last month called for offering the facility again to prevent money laundering abroad.