Finance Min Proposes Legalization of Laundered Money in the Budget

Finance Minister AHM Mustafa Kamal has proposed to legalize the money smuggled from the country in the budget. Once the money is legalized through taxes, no authority, including the income tax authorities, will be able to question its legitimacy.

He made this proposal in his budget speech for the fiscal year 2022-23 on Thursday (June 9).

In his budget speech, the finance minister said that the global economic downturn is being predicted due to the outbreak of coronavirus and the ongoing global volatile situation. In this situation, we may have to face a difficult situation in the next fiscal year.

In this context, more prudent and far-sighted approaches need to be taken in formulating and implementing monetary policy. In order to keep the wheel of the economy moving, we need to provide more revenue to meet government expenditure on the one hand, and on the other hand to bring dynamism in economic activities in the private sector. In this situation, he proposed to add new provisions in the Income Tax Ordinance to increase investment and financial flow by bringing money and assets earned abroad into the mainstream of the economy.

Regarding the new provision, the finance minister said that if tax is paid on any property located abroad as per the proposed provision, no authority including the income tax authority will raise any question in this regard. He proposed a 15 per cent tax on immovable property acquired abroad, 10 per cent on immovable property abroad, and 10 per cent on remittance cash sent to Bangladesh. This facility will be valid from 1st July 2022 to 30th June 2023.

The finance minister said if the proposed provision is implemented, the inflow of foreign exchange into the mainstream of the economy will increase and income tax revenue collection will increase; and the taxpayers will also be relieved to have the opportunity to display their money and assets earned abroad in their income tax returns.

If the finance minister's proposal is approved, the smuggled money will return to the country. And that money will be merged into the mainstream of the economy. He said that the wheel of the economy would be turned by overcoming the crisis.

Abu Hena Moha Razi Hasan, former head of the Bangladesh Financial Intelligence Unit, which works to prevent money laundering, said in a statement that "money can be brought back from developed countries if he wants to; because there is no legal barrier to send money from those countries. However, it is difficult to bring back money if there are allegations of money laundering, crime, and tax evasion in those countries."