The National Board of Revenue (NBR) has decided to allow black money whitening by paying just 15 per cent tax for individuals.
In the next budget for the fiscal year 2024-25, the NBR brings back the opportunity of individual black money whitening closing such opportunities as investing in Economic Zones (EZs) or high-tech parks. In the last five years, the opportunity of whitening black money was available in EZs, but not a single penny of black money was being invested.
Under the new rules, black money can be turned into white without question by paying only 15 per cent tax, said sources of the budget section of NBR.
According to the sources, to bring black money into the mainstream of the economy, the 2019-20 budget allowed unquestioned investment in economic zones or hi-tech parks. Then finance minister AHM Mustafa Kamal said in the budget speech that the income arising from the production of goods or services in economic zones and hi-tech parks has been given tax exemption at various rates for 10 years.
A tax of 10 per cent on the money invested from undisclosed income in setting up industries in economic zones and hi-tech parks to increase investment and create employment. Such investment would not raise any question from the Income Tax Department about the source of that invested money.
After several years economic zones or hi-tech parks got the opportunity to invest black money. But no one took this opportunity in 5 years.
This facility is scheduled to expire on June 30 of the current fiscal year 2023-24. Therefore, black money investment in new economic zones or hi-tech parks is not allowed as part of the advice of the International Monetary Fund (IMF).
Instead, an opportunity to legitimise black money or undeclared income is being offered under a general amnesty (tax amnesty). Of course, for this, you will have to pay more income tax than before.
Earlier black money could be whitened by a 10 per cent tax, in the future, it will be 15 per cent. If the money is legalised in this way, no other organisation of the government can question this, said an official of NBR.
