Govt cancel provision of whitening black money

The government has canceled the facility of making black money white by paying 15 percent tax. The National Board of Revenue (NBR) on Monday (September 2) issued a Statutory Regulatory Order (SRO) in this regard. Now, to legalise any undisclosed income, the applicable tax rate, which can be as high as 30%, must be paid along with an additional 10% penalty on the payable tax.

As a result, the opportunity to legalise undisclosed money in the share market, cash, bank deposits, financial schemes, and instruments by paying 15% tax has been revoked.

However, despite the cancellation of the 15% tax facility for undisclosed income, the existing facility to legalise money by paying a specific tax on the purchase of flats, houses, and land remains unchanged.

In the FY25 budget approved in July, the recently ousted Awami League government permitted the legalisation of black money with a 15% tax.

This decision faced intense public criticism, as legitimate taxpayers are subject to income tax rates of up to 30% plus an additional surcharge. At that time, critics argued that allowing black money to be whitened with a 15% tax could exacerbate financial sector irregularities.

For FY21, the former Awami League government also allowed black money legalisation with a 10% tax. According to NBR sources, a total of 11,839 people legalised about Tk20,500 crore in FY21 – the highest in the country's history in a single year and NBR received Tk2,064 crore in revenue from those investments.

However, despite the cancellation of the 15% tax facility for undisclosed income, the existing facility to legalise money by paying a specific tax on the purchase of flats, houses, and land remains unchanged.