The Bangladesh Bank has given instructions to the nation’s scheduled banks to start a campaign to entice Bangladeshis to send home the undeclared money they earned overseas by paying only 7 per cent taxes. The campaign will be in compliance with the recently passed “Income Tax Ordinance,” which aims to recover unreported income and Bangladeshi citizens’ money laundering activities.
Bangladeshi nationals can report any form of foreign income in their income tax return by paying a 7 per cent tax. The banking system will legitimate such revenue, and neither banks nor other agencies are permitted to inquire about the sources of such income.
On Monday, the central bank released a circular about this matter and forwarded it to all the scheduled banks for further action. The circular outlined the implementation and promotion of the Income Tax Ordinance’s offshore tax amnesty.
According to the circular, under the Finance Act of 2022 and Section 19 of the Income Tax Ordinance of 1984, undeclared money that has accumulated outside of Bangladesh in any form may be lawfully brought into Bangladesh through banking channels and declared in an income tax return by paying 7 per cent tax during the period from July 1, 2022, to June 30, 2023.
The amnesty was challenged by economists and former NBR (National Board of Revenue) employees who said that the program will lead to a rise in money laundering and capital flight from Bangladesh.
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