Budget FY23: Amnesty granted for money launderers

With a payment of a certain rate of tax as penalty, the government offered amnesty for money launderers to get the laundered money back in the proposed budget of the FY2022-23.

According to the proposed provision, no authority, including the income tax authority, will raise any question as to the source of any asset located abroad if a taxpayer pays tax on such assets.

Kamal placed the budget proposal for the FY2022-23 before parliament on Thursday.

The minister proposed a 15 per cent tax on immovable property not repatriated to Bangladesh, 10 per cent on movable property not repatriated to Bangladesh and 7 per cent on cash and cash equivalents repatriated to the country.

This opportunity will be in force for the period starting from the first day of the new FY23 and will end on the June 30, 2023.

Kamal said, the proposed provision, when implemented, will increase the flow of foreign currency to our economy, increase income tax revenue and the taxpayers will also feel relieved by availing this opportunity to declare their assets and money acquired/earned abroad in their respective income tax returns.

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Terming it unconstitutional and unethical, Transparency International Bangladesh (TIB) Executive Director Iftekharuzzaman opposed the proposal.

“The implementation of such plan will let down the Money Laundering Prevention Act, 2012,” he said.

The prospect of repatriating the smuggled out money under the plan was bleak, he said.

However, the TIB executive director demanded the cancellation of such a plan.

Referring to the findings of the Global Financial Integrity, TIB said the agencies concerned should be allowed to check the capital flight from the country.

A report, released in January 2019 by Global Financial Integrity (GFI), said the illicit capital outflow went unabated as a total of $81.74 billion was smuggled out of Bangladesh from 2006 to 2016.

Former caretaker government adviser AB Mirza Azizul Islam believes the move will discourage legitimate taxpayers.

The amnesty to undisclosed asset holders outside the country is meaningless, he said. 

The economist also said, "It is neither ethically correct nor will bring any benefit to the economy as such scope has never yielded positive results in the past."

In the budget proposal, Kamal said that the outbreak of Corona virus and the ongoing unstable condition in certain parts of the world forebode a recession in the global economy. Under the circumstances, we might have to face tough challenges in the coming fiscal year.

“As such, we have to be more prudent and visionary in adopting and implementing fiscal policy. To keep the economy going, we have to arrange for more revenue for the government expenses on one hand, and also have to make the economic activities in the private sector more vibrant and dynamic on the other,” he said.

The minister said, “Money earned and asset acquired abroad can be mainstreamed into our economy with a view to creating a flow of fresh fund and investment for economic activities.”