Tk15,000cr in concealed wealth traced as years of tax evasion comes under scanner
Tax intelligence finds assets linked to 3,100 individuals and firms
Nearly Tk15,000 crore in hidden assets and income linked to more than 3,100 individuals and entities, has been unearthed by Bangladesh's tax intelligence over the past year, as political change begins to expose years of entrenched tax evasion.
Officials say the disclosures, many tied to beneficiaries of the Awami League's 15-year rule, have sparked a discreet rush among evaders to settle their dues before deeper scrutiny sets in.
Confirming the trend, Md Abdur Rakib, Commissioner of the Income Tax Intelligence Unit, told The Business Standard that 213 individuals and companies have paid Tk380 crore in evaded taxes over the past year after their hidden assets and income were detected.
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He said, "So far, we have traced concealed assets and income amounting to around Tk15,000 crore. If the actual taxes and penalties due on this income can be recovered, the amount would be approximately Tk5,000 crore."
Stating that at least 3,100 individuals and entities are involved, he added, "The investigation is ongoing, and this number is likely to increase."
Besides the Tax Intelligence Office, the NBR's Central Intelligence Cell (CIC) and the Customs Intelligence and Investigation Unit are also probing tax evasion and money laundering involving several high-profile individuals and organisations. These investigations have revealed significant tax evasion beyond the assets currently under discussion.
Sources at the Tax Intelligence Office said the accused entities include some of the country's leading corporate groups and their directors.
The list of individuals and organisations includes company directors, travel agencies, firms, and businesspersons. It also includes public and private individuals and entities involved in mega projects such as the Padma Bridge, as well as individuals accused of stock market scams.
A notable number of political figures are also on the list, widely believed to have accumulated illegal wealth during the tenure of the previous Awami League government.
Current and former officials of various government institutions are also included; among them are officers and employees of the Income Tax and Customs departments themselves.
Those identified include members of the administration cadre, police, judiciary, sub-registrar offices, Roads and Highways Department, Public Works Department, Passport Office, Local Government Engineering Department, and the Power Development Board.
Doctors, engineers, and journalists have also not been spared from the list of those accused of concealing assets.
Md Abdur Rakib said concealed assets belonging to at least 200 current and former engineers from various government agencies and their family members have been identified. More than 25 of them have reportedly admitted liability and quietly paid the assessed taxes.
The list also includes dependent family members of employees of these organisations – such as parents, siblings, spouses, and in-laws.
However, the Tax Intelligence Office has declined to disclose the names of individuals and entities accused of concealing assets or those who have already admitted liability and paid taxes.
According to officials, investigations have uncovered tax evasion of up to Tk1,200 crore by a single entity. Among those who have paid taxes on concealed income, the highest payment by a single assessee so far stands at Tk50 crore.
Sources said the concealed assets were primarily invested in land, apartments, and vehicles.
A visit to the Tax Intelligence Office at the Dak Bhaban in Agargaon revealed a heavy presence of lawyers representing accused individuals or entities seeking to resolve their cases.
The agency said investigations are ongoing and that, with the support of the next government after the national election, it would be possible to uncover concealed assets and income linked to a far larger number of individuals and entities.
Sources at the NBR's Income Tax Intelligence and Investigation Unit (ITIIU) said many of those whose tax evasion has been detected are quietly approaching the authorities to settle their dues, fearing public exposure.
Experts believe that most of the uncovered assets are illegal. If investigated by agencies beyond the tax authorities, the origins of these assets could be established – potentially leading to full confiscation and prison sentences of up to 14 years.
How tax is calculated on concealed assets
Under Bangladesh's existing income tax laws, assets that generate no income are not taxable. However, if concealed assets are discovered that were not declared in tax returns, they are treated as income and taxed according to the income tax rate applicable in the year the assets were concealed.
Currently, the maximum personal income tax rate in Bangladesh is 30%, although it was 25% until two years ago. In most cases of detected concealed assets, the highest tax rate is applied, along with penalties.
If concealed assets from one year earlier are detected, a 10% penalty is imposed on the payable tax; for two years earlier, the penalty is 20%. The penalty increases by 10% for each additional year, up to a maximum of 70%.
For example, if a person failed to declare Tk5 crore in assets acquired six years ago, and the tax rate at the time was 25% with a 50% penalty, the tax would amount to Tk1.25 crore and the penalty Tk62.5 lakh, bringing the total to just over Tk1.87 crore.
Were the discovered assets legal?
NBR officials believe most of the uncovered assets were acquired illegally. However, since income tax laws only provide for tax recovery in cases of asset concealment, the tax authorities do not determine whether assets were purchased with legal or illegal funds.
That responsibility lies with agencies such as the Anti-Corruption Commission (ACC).
As a result, determining how the assets linked to the 3,100 individuals and entities were acquired now falls to the ACC and other relevant agencies.
Experts say that if the ACC investigates these cases, it would be possible to establish whether the assets were acquired illegally.
According to stakeholders, widespread corruption during the previous government led to massive accumulation of illegal wealth in both public and private sectors, much of which was laundered abroad.
A report by the White Paper Committee formed by the interim government stated that around Tk28 lakh crore was siphoned out of the country during the Awami League's 15-year rule.
The then prime minister Sheikh Hasina herself once said at a press conference that a person working a low-grade job in her office had amassed Tk400 crore in wealth.
However, not all concealed assets are necessarily illegal. Some individuals may have sold land or earned income legally but failed to declare it to avoid harassment by tax authorities–such assets are also subject to taxation.
Former NBR member Dr Syed Md Aminul Karim told TBS, "Out of fear that entering the tax net means trouble, many people do not declare even legally earned income."
"But those who earn illegal money are extremely cunning. They hide their wealth in complex ways at home and abroad, making it difficult to trace."
ACC should investigate: TIB
Dr Iftekharuzzaman, Executive Director of Transparency International Bangladesh (TIB), told TBS that a significant portion of the recovered assets are likely to have been acquired illegally.
"The tax intelligence authorities should share this information with the ACC so that thorough investigations can determine how these assets were acquired," he said.
"If illegally acquired assets are allowed to be legitimised simply by paying tax, it would amount to 'light punishment for grave crimes'," he added.
Under ACC laws, illegal asset acquisition can lead to confiscation of assets and imprisonment of up to 14 years—though such punishments are rare in Bangladesh.
Dr Iftekharuzzaman further said that anyone—public or private—who assisted in acquiring such assets illegally should also be brought under the law.
