Regulatory policy

Little reaction from money launderers as new money laundering policy takes effect

Government tax officials expect around Tk 2,000 crore in taxes laundering the undisclosed money as the amnesty budget bait begins to elicit responses.

According to estimates by tax authorities, the first of its kind scheme of laundering black money by paying a 7% tax could attract embezzled money amounting to around Tk 30,000 crore.

A Bangladeshi passport holder can repatriate money in all its forms – cash, bank deposits, banknotes, bank accounts, convertible securities and financial instruments – under the regime in force in the current financial year.

National Board of Revenue (NBR) officials have made projections based on the previous money laundering trend as well as hints of some people who are willing to bring in money from overseas given the latest developments in offshore tax havens.

Last December, US President Joe Biden’s administration pledged to announce an anti-corruption strategy to control money laundering in their real estate deals and front companies.

It has been learned that Canada and other Western countries may also adopt such regulations and in this case, expats who have invested in real estate, especially in cash, may have to show legal documents on money transfers. .

Such measures are taken all over the world to control the financing of terrorism and due to certain geopolitical problems.

The US Treasury Department said in a statement: “The US housing market continues to be used as a vehicle for money laundering.”

A Washington-based think tank, Global Financial Integrity (GFI), estimated last August that at least $2.3 billion in dirty money had been laundered through real estate transactions in the United States over the past five years. .

Concerned sources say that there are influential Bangladeshis who have invested in the US and other countries but would not be able to show legal investment documents.

The government has received requests from them to facilitate the repatriation of money under the amnesty.

Tax experts, however, believe that without collecting data on black money holders, no one would feel the need to disclose their assets or their money.

After the amnesty proposal, the Center for Policy Dialogue (CPD) called the possibility of bringing the laundered money back into the country as politically, economically and ethically unacceptable.

He said ordinary taxpayers as well as honest businessmen would be frustrated if money siphoned out of the country was allowed to be legalized.

Following widespread criticism, the government dropped two of its proposed measures in the final budget regarding money laundering without repatriation.

Since July 1, 2022, the special regimes aimed at laundering black money by paying 25% tax at the highest rate and 10% above have been abolished following an incorrect answer.

The Income Tax Ordinance contains permanent provisions on voluntary disclosure of income.