INVESTMENT IN INCOME GENERATING SECTORS

223 people legalise only Tk 198cr in 3yrs

Staff Correspondent | Published: 00:00, Jul 10,2019

 
 

The National Board of Revenue got a very poor response from undisclosed money holders to its offer of legalising such money by investing in income generating sectors as 223 people legalised only Tk 198 crore in last three fiscal years under the provision of voluntary disclosure.

The NBR received only Tk 37 crore in taxes and penalty in the three fiscal years — FY17, FY18 and FY19.

According to the revenue board data, 85 people legalised Tk 126 crore undisclosed money and paid Tk 13 crore in taxes and penalty in the just concluded fiscal year (2018-2019).

In FY 2017-18, a total of 90 people availed them of the scope and legalised Tk 65.90 crore and paid Tk 17.71 crore in taxes.

A total of 48 people legalised more than Tk 5.66 crore in FY 2016-17 under the provision of voluntary disclosure of the Income Tax Ordinance-1984.

According to the provision, people having untaxed income are allowed to legalise the money by investing in income generating activities like industrial enterprises, extension of an existing industry, buying/constructing buildings, apartments, land, securities listed with stock exchanges and in any trade, commercial and industrial ventures engaged in production of goods and services by paying 10 per cent penalty along with the regular tax at the rate of highest 30 per cent.

The government offered the scope in FY2013 by incorporating the provision in the tax law.

There is another provision in the law under which people can legalise undisclosed money by purchasing residential buildings and apartments paying tax at varying rates for different cities.

The NBR, however, did not prepare the data related to legalisation of money under the provision.

Tax officials said that the benefit was offered to bring the undisclosed or untaxed money into the formal channel but such money holders responded to the offer very poorly.

Though tax officials do not raise any question about the source of money, taxpayers do not feel comfortable to avail the benefit fearing that they would come under the scanner of other government agencies, including Anti-Corruption Commission, they said.

In this context, the government in the budget for the current fiscal year offered a blanket offer to legalise undisclosed money through investing in economic zones and hi-tech parks and by paying only 10 per cent tax for next five years.

Economists and experts, however, have been opposing any scope of legalisation of undisclosed money.

Such provision works as punishment for honest taxpayers for regular payment of tax while as reward for not payment of tax, they argued.

It also demoralises the honest taxpayers while encourages accumulation of money in illegal ways such as extortion and bribery, they said.

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