Many banks reluctant to share info on suspected tax dodgers: NBR officials
This constitutes a criminal offence, and under the existing Income Tax Act, the responsible officer at the respective bank will be deemed a defaulter for the same amount of tax under the “assessee in default” provision, they have noted.
Officials from the National Board of Revenue (NBR) have accused some banks of being reluctant to provide information on transactions by suspected tax evaders when requested.
This constitutes a criminal offence, and under the existing Income Tax Act, the responsible officer at the respective bank will be deemed a defaulter for the same amount of tax under the "assessee in default" provision, they have noted.
"You [banks] are a crucial source of information, and this is a legal obligation. Failure to cooperate could lead to strict action."
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Additionally, show-cause notices have already been issued to the managing directors of seven banks due to their lack of cooperation, the officials said during a workshop titled "Mutual Cooperation to Prevent Money Laundering and Tax Evasion."
NBR intelligence officials and senior representatives from various banking institutions attended the programme held at the NBR headquarters in the capital on Wednesday (19 February).
"We are investigating tax evasion involving approximately 700 individuals and organisations," said Md Abdur Rakib, commissioner of the Income Tax Intelligence and Investigation Unit.
"Despite our requests, banks often withhold or provide incorrect information. In many cases, details of joint accounts and fixed deposit receipts (FDRs) are not disclosed."
Emphasising the gravity of the issue, he said providing false information is a criminal offence.
NBR Chairman Abdur Rahman Khan reiterated the necessity of financial data for intelligence activities.
He urged banks to comply with legal requirements, stating, "You [banks] are a crucial source of information, and this is a legal obligation. Failure to cooperate could lead to strict action."
Ahsan Habib, director general of the Central Intelligence Cell of NBR, cautioned bank officials against encashing suspicious cheques, revealing that some banks hold blank cheques linked to potential tax evasion cases.
Speaking to The Business Standard after the event, he disclosed, "There are some blank cheques associated with the Center for Research and Information (CRI), a think tank affiliated with the Awami League, as well as former minister Nasrul Hamid and several other individuals and organisations. I have advised against withdrawing these funds."
Md Khairul Islam, commissioner of the Large Taxpayers Unit (LTU) at NBR, raised concerns over unaccounted financial transactions, stating, "A significant amount of money is being debited from certain accounts daily, yet we don't get answers regarding its destination."
Highlighting the severity of money laundering, the NBR chairman stressed, "Money laundering is the primary cause of economic crises. If we fail to prevent money laundering, it will pose a long-term threat."
Responding to NBR officials' statements, Syed Mahbubur Rahman, managing director of Mutual Trust Bank, told TBS, "Our bank provides information to the authorities in a timely manner."
However, he acknowledged the operational challenges, saying, "We receive numerous queries from different agencies daily, requiring substantial time and manpower to process. Thousands of pages of documents have to be submitted while ensuring accuracy – this entails significant risk."
The seasoned banker, also a former president of Association of Bankers' Bangladesh, suggested, "A coordinated approach to requesting such information would be more efficient."
During the workshop, the NBR chairman also emphasised the necessity of automating the information exchange process.
Contacted, Bangladesh Bank Spokesperson Arif Hossain Khan said, Banks are obligated to provide information to the central bank, just as they are to other regulatory bodies.
However, without knowing the context and reasons behind the NBR officials' grievances, it would not be appropriate to comment in detail, he said.
Addressing financial misconduct, NBR official Ahsan Habib said, "S Alam's companies have conducted transactions worth Tk2.42 lakh crore through banks. It took seven tax officers an entire month to scrutinise these transactions.
"S Alam's two sons declared assets worth Tk500 crore to secure citizenship in Singapore."
Commenting on the broader issue, he warned, "Whenever a political government comes to power, oligarchs attempt to evade accountability."
"Therefore, our focus remains on completing critical investigations," he added.
