• Tuesday, July 29, 2014

Amnesty for black money in real estate gets poor response

Sohel Parvez

The National Board of Revenue has received a lukewarm response from an amnesty for black money in purchasing apartments in the outgoing fiscal year, taxmen said.
The NBR earned only Tk 26 crore during July-April this year from people who paid a certain amount of tax to legalise their undisclosed money while buying apartments or making homes.
In the recent past, the scope to whiten black money through the real estate sector was given in fiscal 2010 and 2008 when the tax administrator had earned Tk 29 crore and Tk 75 crore respectively.
Taxmen linked the poor response to a high rate of tax for whitening black money and risks of being caught by government agencies such as Anti Corruption Commission while purchasing homes without mentioning the source of wealth.
"The tax rate is too high to attract people. That's why, a large number of people, who hold undisclosed money, are unwilling to take the scope," said an income tax commissioner, asking not to be named.

The NBR has given the amnesty, but other authorities may ask about the sources of their money, he said.
The government in fiscal 2013 gave the scope to whiten undisclosed money by paying fines, despite opposition from different quarters.
Between fiscal 1972 and fiscal 2013, some Tk 13,808 crore was whitened, with the NBR receiving taxes worth Tk 1,455 crore.
Analysts say the scope which is offered every year creates a culture of tax evasion and acts as a disincentive to honest taxpayers.
During July-April of the current fiscal year, a total of 205 persons voluntarily disclosed their untaxed money and whitened Tk 234 crore by paying fines, according to the NBR.
A year ago, 344 people chose to whiten Tk 293 crore.
Under the scope in the housing sector, people can legalise their undisclosed money by building or buying homes or apartments through paying taxes between Tk 700 and Tk 7,000 per square metre of floor space, subject to the location.
Some 2,550 persons took the amnesty in the housing sector during July-April this year, according to the NBR.
Liakat Ali Bhuiyan, vice president of Real Estate and Housing Association of Bangladesh, admitted that the response to the provision of allowing undisclosed money has been poor from the beginning of the current fiscal year.
"We were not benefitted much by the amnesty this fiscal year. It is mainly because of the political turmoil in the run up to the election," he said, demanding extension of the provision for the upcoming year as well.
Capital will flow out of the country unless the scope is given, he said.
At a pre-budget meeting with the Economic Reporters' Forum on April 30, NBR Chairman Ghulam Hussain spoke in favour of amnesty for black money, saying it might arrest rampant capital flight from the country to Malaysia, Dubai and Canada.
Later, Finance Minister AMA Muhith said the government will not give the scope of whitening black money in the upcoming budget.

Published: 12:00 am Tuesday, May 20, 2014

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