Govt considers ending controversial black money whitening scheme

The interim government is currently exploring ways to eliminate the controversial black money whitening scheme, which currently allows individuals to regularise undeclared income with a 15% tax, according to sources from the National Board of Revenue (NBR).

NBR officials recommended the cancellation of this facility during a meeting with the Finance Adviser to the interim government, Salehuddin Ahmed, at the NBR headquarters in the capital's Agargaon on Tuesday (27 August).

Following the meeting, a senior NBR official, speaking anonymously, told TBS, "The finance adviser said he will present this issue at the Advisory Council meeting. A final decision will be made afterwards, as cancelling the scheme will require the issuance of an ordinance."

In the FY25 budget approved in July, the recently ousted Awami League government permitted the legalization 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.

Recently, the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), a leading business organisation, has also called for the cancellation of this controversial scheme.

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.

After the NBR meeting, the financial adviser told reporters, "The financial sector is in a precarious state. Nevertheless, we have managed to keep the entire economy functioning."

The sector was destroyed in a period of 15 years, hence, its recovery will take time, he added.

On 20 August, during a meeting with business leaders, Chief Adviser Muhammad Yunus also said the interim government inherited a fragile economy but expressed confidence that significant reforms would soon lead to improvements.

Finance Adviser Salehuddin Ahmed on Tuesday directed NBR officials to expedite the clearance of goods at the port and to ensure swift processing of import-export consignments.

He said, "We must ensure that the government does not create any obstacles for taxpayers. Those who pay their taxes regularly should not face harassment, while those who evade taxes should not be exempted."

NBR Chairman Abdur Rahman Khan was also present at the press briefing after the meeting.

He said, "We aim to collect revenue from businessmen by earning their full confidence, which will help us meet our revenue targets."

Abdur Rahman also emphasised his commitment to timely revenue collection.