The tax authority’s receipts from black money dropped 94.4 per cent year-on-year in fiscal 2021-22 after the increase in tax rate and additional penalty dulled the black money holders’ interest to legalise their undisclosed wealth. Last fiscal year, Tk 116.27 crore came in taxes and fines after 2,311 people legalised their undeclared wealth.
A year earlier, when the government had provided the scope to clean black money without any question asked regarding the source, a record Tk 2,064.9 crore was received by the NBR from 11,859 individuals. The reason for the poor response is the increase in the tax rate and the imposition of penalties. In fiscal 2021-22, the tax for legalising undisclosed wealth by investing in the stock market, banks’ savings products or national savings certificate was 25 per cent and there was another 5 per cent penalty on the computed tax. The tax was 10 per cent in fiscal 2020-21 and there was no additional penalty. Subsequently, in fiscal 2021-22, 51 individuals legalised their hidden wealth by investing in the stock market, down from 286 a year earlier. The NBR received Tk 3.31 crore from the option, down 91.8 per cent year-on-year.
Some 2,251 people declared their bank savings products or national savings certificate and cash holdings, yielding the NBR Tk 112.87 crore last fiscal year. In fiscal 2020-21, 11,573 individuals gave the NBR Tk 2,024.64 crore in taxes by legalising their bank savings products or national savings certificate and cash holdings. Undisclosed wealth could also be legalised by setting up new industries last fiscal year and the tax for that is 10 per cent. Only nine people took up on the offer, with the NBR receiving Tk 90 lakh.
This fiscal year, the government has withdrawn the tax amnesty to black money at home, instead taking aim at wealth stashed abroad. Cash squirrelled away in foreign shores can be repatriated through the banking channel by paying a 7 per cent tax. According to the GFI report released in January 2019, the illicit capital outflow went unabated as US$5.9 billion was siphoned off from Bangladesh in 2015 and a total of $81.74 billion was siphoned off from Bangladesh from 2006 to 2016. The government should take effective steps to repatriate the siphoned money by any means and slash tax and VAT burden on the citizens.
