Such investments reached around Tk6,000cr during this period, and the housing sector received the largest amount
During the first six months of the 2020-21 Fiscal Year, 6,937 individual taxpayers invested their undisclosed wealth in various sectors throughout Bangladesh.
Such investments reached around Tk6,000 crore during this period, and the housing sector received the largest amount. As of 30 December, these individuals paid the government Tk880 crore in taxes after filing returns mentioning their investments, NBR sources said.
However, the number of individuals filing their tax returns has dropped in the FY20-21 when compared to FY19-20. Till 30 December, 20.41 lakh individual taxpayers had submitted their returns, a fall from 22 lakh in 2019-20.
The individuals paid the government around Tk3,000 crore in taxes during the current fiscal year.
Speaking with the media, NBR's Chairman Abu Hena Md Rahmatul Muneem termed as positive the individual taxpayers' move to invest black money inside the country instead of laundering their wealth abroad.
He added that the NBR will not seek information from taxpayers on the source of black money that has been whitened by paying taxes.
Meanwhile, experts pointed out that the amount of undisclosed wealth invested by individuals in various sectors across Bangladesh is only a fraction of the total amount of black money.
They added that only a handful of people belonging to the middle-income group have invested their undisclosed wealth in the capital market and housing sector during the six month period.
Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh, said, "Though the NBR has received some money in taxes, the amount of investment is not very high compared to the amount of black money.
"A portion of the wealthy people have taken this opportunity, by honest taxpayers will be discouraged."
According to the NBR, 6,749 individuals whitened their untaxed wealth by paying taxes on previously undisclosed cash in possession, funds in banks, and by purchasing flats and plots. The government received TK858 crore in taxes from this sector.
Moreover, 188 individuals have whitened their money by investing Tk225 crore in the capital market, and the government received TK22 crore in taxes from this sector.
The government has given the scope for investing black money in the capital market, savings certificates, bonds or any other securities, and depositing in banks, by paying a flat 10% tax from 1 July last year.
Undisclosed immovable property can also be legalised by paying a certain amount based on the size and location. The government introduced the move in a bid to counteract the economic shock brought on by the Covid-19 pandemic.
This opportunity is available for only one year – from 1 July 2020 to 30 June 2021. It should be noted that a maximum of 25% tax can be imposed on the disclosed income of any individual taxpayers, but it is only 10% on the undisclosed wealth.
Since the independence of Bangladesh, most governments have provided the opportunity to whiten black money, but the initiatives have mostly failed to get any serious attention, as various government agencies could seek information on the source of the undisclosed income.
So, the NBR amended the law in 2020 so that no one could seek information about the source of the black money during or after the whitening process.
The individual taxpayers whitened undisclosed money amounting to Tk450 crore in the Fiscal Year 2015-16, but there is no data after that, said NBR sources.
However, the NBR added that Tk9,682.99 crore was whitened during the caretaker government era, while this amount is Tk13,372 crore during the 44 years between 1972 and 2016.The government also earned revenue amounting to Tk1,454 crore from this process.
There is currently no accurate statistics on the amount of black money in the country. But a finance ministry report in 2010 revealed that the amount would be around 37 percent of Bangladesh's GDP.
Besides, US-based think tank Global Financial Integrity (GFI) revealed that Tk530,000 crore have been laundered from Bangladesh in the ten years between 2005 and 2015. The organisation estimates that more than Tk50,000 crore is being laundered out of Bangladesh every year.
According to a survey conducted by the Bangladesh Economic Association in 2018, undisclosed money amounting to Tk5-7 lakh crore is being circulated in Bangladesh's economy annually.