Tk 676cr legalised by 222 taxpayers
The amount of undisclosed money legalised in fiscal 2014-15 surged to Tk 676.87 crore from Tk 176 crore in the previous year, according to the National Board of Revenue.
The state, however, got only Tk 27.50 crore in tax from 222 black money holders whereas the amount should have been much higher, considering the sum of the legalised money, said NBR officials.
This was because a number of taxpayers showed their previously earned money in certain sectors like fish farming which have reduced tax rates, they said.
In fiscal 2013-14, the NBR collected Tk 20.12 crore in tax from holders of undisclosed money.
Seeking anonymity, a senior NBR official said, "It appears that some people legalised their undisclosed income by taking advantage of the loopholes in the law."
The income tax law gives taxpayers the opportunity to declare their previously earned income in their tax returns, given that they pay 10 percent penalty on top of “tax payable at applicable rates”.
As per the law, an individual taxpayer has to pay between 10 and 30 percent tax depending on the amount of the income unless it is tax-free. In the current fiscal year, the tax-free threshold is Tk 250,000, which was Tk 220,000 in fiscal 2014-2015.
The NBR official said since the tax rate for some sectors, including fish farming, was as low as 3 percent in the last fiscal year, some people showed their previously earned money as income from fish farming, and paid a 10 percent penalty on top of 3 percent tax.
"That is why the amount of tax money didn't increase in proportion to the undisclosed money legalised in the last fiscal year. We are looking into the matter. We will take steps if we find that anyone took advantage of the facility, violating the law.”
NBR officials said the government brought changes to the income tax law in the current fiscal year to check the illegal practice.
Now, a taxpayer, while submitting tax returns, cannot show his previously earned money in sectors with reduced tax rates that were applicable in that particular year, they said.
NBR data shows that 157 people whitened their undisclosed money in fiscal 2013-14. Almost half of them were from the tax zone in Comilla, four tax zones in Chittagong, Tax Zone-2 in Dhaka and the tax zone in Sylhet.
In fiscal 2014-15, there was a rise in the number of taxpayers from Chittagong and Sylhet.
In the port city, 38 taxpayers declared their previously earned income in fiscal 2013-14. The number rose to 115 in fiscal 2014-15.
In Dhaka, 11 taxpayers under Large Taxpayer Unit whitened their undeclared income of Tk 306 crore in the last fiscal year, according to the NBR.
In July 2013, the government offered tax concessions for fish farming for two years to encourage diversification and boost fish production.
Sources said some businessmen, politicians and even government officials abused the privilege. It was easy for them to claim any amount of income from fish farming, as it's tricky to assess fish stocks in ponds.
The government has retained the facility of reduced tax rate for fish farming in the current fiscal year as well.
Under the privilege, first Tk 10-lakh income from fish farming will be tax-free. Five percent tax is applicable on income between Tk 10 lakh and Tk 20 lakh, and 10 percent for any amount above Tk 20 lakh.
The facility also applies to poultry farming and shrimp hatcheries.
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