Scope to whiten money through stocks to go

The finance minister has proposed abolishing the scope for whitening of black money through the stock market.

AHM Mustafa Kamal made the recommendation today while placing the proposed national budget for 2022-23 fiscal year in the parliament.

Last year, the government had extended time to whiten undisclosed income through stocks and ensured that no authority will raise question about the source of the fund.

Tax for whitening of black money was increased to 25 per cent from the previous 10 per cent and levied extra 5 per cent penalty tax on the amount of the 25 per cent tax.

Along with the tax, a condition was given that the investment will have to be kept in the stock market for at least a year.

The government has been continuing the provision of whitening money in the stock market for several years, but it failed to attract any big fund yet and leave any impact on the liquidity of the market, said Md Moniruzzaman, managing director of IDLC Investments, a leading merchant bank.

"On the other hand, I do not support such money whitening opportunity in principle," he added.

In 2020-21 fiscal year, Tk 282 crore was whitened by means of investments in the stock market by paying a 10 per cent tax and the exchequer got around Tk 28 crore as tax against this investment.