Laundered money to turn white in new budget proposal

The latest budget has proposed Bangladeshis a scope for legalising their unreported assets outside the country without facing any question in the next fiscal year, subject to paying taxes ranging from only 7% to 15%.

With a view to keeping the economy going and increasing government revenue, Finance Minister AHM Mustafa Kamal said, "According to the proposed provision, no authority, including the income tax authority, shall raise any question as to the source of any asset located abroad if a taxpayer pays tax on such asset."

The privilege will remain in force for a year till June 2023, according to the FY23 budget proposal.

The proposed rate is 15% for immovable property not repatriated to Bangladesh, 10% for movable property not repatriated to Bangladesh and 7% for cash and cash equivalents repatriated to Bangladesh. 

The minister hoped it would encourage taxpayers to declare the relevant assets and increase the flow of foreign currency.

The tax amnesty will allow owners of such assets and cash to get into tax compliance and avoid fines, penalties and criminal charges.

Coming down hard on the proposal, Special fellow at the Centre for Policy Dialogue Debapriya Bhattacharya, said, "We all know in most cases, these are money sent abroad from Bangladesh through illegal means and the money itself has been earned mostly through illegal means. Why on earth has a political government, committed to fairness and justice, proposed this? It is totally unacceptable, incorrigible and unthinkable from a political perspective."

He also said the move would have no economic value, saying, "We know that in most of the developed countries the relevant authorities are hounding down people who have laundered money to their country, acquired wealth and pushed up the market prices. They are also checking out their sources. So is it why my government is proposing this kind of way out for those people? This is totally unacceptable."

Rizwan Rahman, president at Dhaka Chamber of Commerce and Industry, said, "Offering amnesty from prosecution to those who did not report their assets will be unfair to large taxpayers from the business sector, who account for 38% of revenue collection."

As per the existing Money Laundering Prevention Act, any person who commits or abets or conspires to commit the offence of money laundering shall be liable to be punished for a minimum of four years and maximum of twelve years of imprisonment. In addition to that a fine equivalent to twice the value of the property involved in the offence or Tk10 lakh, whichever is higher, shall be imposed.