The
opportunity to legalize undeclared money through investments in real estate,
homes, flats, apartments, floor spaces, and land by paying a specified tax per
square meter based on location still remains. On September 2, 2024, the
National Board of Revenue (NBR) issued a notification canceling the provision
to legalize black money by paying 15 percent tax on securities, cash, bank
deposits, financial schemes, instruments, and all types of deposits or savings.
However, the provision allowing undisclosed assets (black money) to be
legalized by paying a fixed tax in the real estate sector, as announced in the
budget, remains intact.
Experts
argue that the provision to legalize black money is entirely unconstitutional
and unethical. It creates a pathway for corrupt elites to legitimize their
undisclosed or illicit income. Such policies encourage and protect those who
earn money through corruption or illegal means. If no questions are raised
about the source of funds after paying a fixed amount per square meter in the
real estate sector, it will further deepen societal opacity and injustice.
Former
NBR member (Customs and VAT), Md. Farid Uddin, told Bonik Barta, “All
opportunities to legalize black money should be abolished. It’s unfair and
discriminatory, posing a serious threat to social justice. If the interim
government maintains this policy, it would be an injustice to the core demands
of the students’ movement, as it contradicts their cause.”
The
highest tax for legalizing black money in the real estate sector, based on
per-square-meter payments, applies to elite areas in the capital, Dhaka.
According to NBR’s circular, in the mouzas under Gulshan, Banani, Motijheel,
Tejgaon, Dhanmondi, Wari, Tejgaon Industrial Area, Shahbagh, Ramna, Paltan,
Kafrul, New Market, and Kalabagan police stations, the tax is BDT 6,000 per
square meter for homes, flats, apartments, or floor spaces, and BDT 15,000 per
square meter for land.
Currently,
property prices in Dhaka’s elite areas, such as Gulshan and Banani, are the
highest in the country. In some cases, apartment prices in these areas exceed
those of luxury apartments in London, Dubai, or New York. Some apartments are
even being sold for BDT 200 million to BDT 300 million, while their registered
prices are shown as BDT 10 million to BDT 20 million. A significant portion of
buyers for these apartments are government officials, although no official,
under the current pay structure, should be able to afford such properties.
Former
Inspector General of Police (IGP) Benazir Ahmed and his family bought four
apartments in Gulshan in a single day. According to the Anti-Corruption
Commission (ACC), the price of the four flats, totaling 9,192 square feet, was
shown as BDT 21.9 million, while the market value exceeds BDT 250 million. All
payments were made in cash. Like Benazir, many senior police officers have
purchased plots and apartments in elite areas using undeclared funds.
Provisions like legalizing black money create opportunities for corrupt
government officials, political leaders, businesspeople, and elites to
legitimize their illicit earnings.
According
to NBR’s notification, the provision for legalizing black money extends beyond
homes, flats, apartments, and land to also include industrial establishments.
When asked on Saturday (September 14) whether this includes factories and other
industrial sites, NBR member (Income Tax Policy) AKM Badiul Alam told Bonik
Barta, “Any establishment, including industrial sites, falls under this
provision.”
When
asked about those who declared undisclosed wealth from July 1 to September 1
following the start of budget implementation, AKM Badiul Alam said, “The
opportunity wasn’t canceled at that time. They will still have that chance.
However, it must be ensured that their payments were deposited through the ‘e
challan’ by that date. Retroactive deposits won’t be allowed.”
According
to a circular from the National Board of Revenue (NBR), individuals who own
structures, houses, flats, apartments, or floor spaces in various mouzas within
the jurisdiction of Bangshal, Mohammadpur, Sutrapur, Jatrabari, Uttara Model,
Cantonment, Chawkbazar, Kotwali, Lalbagh, Khilgaon, Shyampur, Shahjahanpur,
Mirpur Model, Darus Salam, Dakshinkhan, Uttarkhan, Turag, Shah Ali, Sabujbagh,
Kadamtali, Kamrangirchar, Hazaribagh, Demra, Adabor, Gandaria, Khilkhet,
Airport, Uttara West, Mugda, Rupnagar, Bhashantek, Badda, Pallabi, Vatara in
Dhaka district; Khulshi, Panchlaish, Pahartali, Halishahar, Kotwali in
Chattogram; Narayanganj’s Sadar, Sonargaon, Fatullah, Siddhirganj, Bandar, and
all mouzas under Gazipur’s Sadar Police Station will need to pay BDT 3,500 per
square meter in tax. For land, the tax will be BDT 10,000 per square meter to
legalize undeclared wealth.
The
Finance Act 2024, passed along with the budget, allows the legalization of
black money. It stated that regardless of the Income Tax Act, 2023 or any other
law, neither the income tax authorities nor any other statutory government body
can question the source of any asset acquired by an individual if the person
discloses the unreported wealth in their income tax return for the 2024-2025
tax year and pays the applicable taxes before submitting the return or an
amended return by June 30, 2025. However, if there are ongoing proceedings
under Section 200 of the Income Tax Act, 2023 for tax evasion, or if criminal
proceedings are in place under this or any other law, the opportunity will not
be available.”
In
response to this policy, former Director General (Legal and Prosecution) of the
Anti-Corruption Commission, Moidul Islam, told Bonik Barta, “All forms of
undisclosed wealth should be abolished. Otherwise, corruption will be
encouraged. Why shouldn’t the source of income and its legitimacy be
questioned? Poor people sell lands, and the wealthy buy them. They commit
crimes by evading taxes and get pardoned to legalize illicit wealth! This is
against the Constitution. Article 20 of the Constitution states that unearned
income cannot be enjoyed.”
In
areas under Dohar, Nawabganj, Keraniganj, Savar, and Dhamrai upazilas in Dhaka
district; Akbar Shah, EPZ, Karnaphuli, Chawkbazar, Chandgaon, Double Mooring,
Patenga, Bandar, Bakalia, Bayezid Bostami, Sadarghat in Chattogram district;
Joydebpur, Kaliganj, Basan, Konabari, Gacha, Tongi, Tongi West in Gazipur; and
Rupganj and Araihazar upazilas in Narayanganj, BDT 1,500 per square meter will
be charged for structures, houses, flats, apartments, or floor spaces, while
BDT 3,000 per square meter will be levied for land to legalize undeclared
wealth.
Real
estate developers believe the option to disclose unreported wealth through
investment in the housing sector should remain. Liakat Ali Bhuiyan, Senior
Vice-President of the Real Estate and Housing Association of Bangladesh (REHAB)
and Chairman of Brickworks Limited, told Bonik Barta, “Not much undisclosed
money is invested in the housing sector. We only get small amounts. We don’t
call it black money. It’s from people who forgot to report it or didn’t declare
it in their tax files. We encourage them to invest in the housing sector. But
we discourage black or illegal money. We want investment from unreported but
not illegal funds.”
Outside
Dhaka South, Dhaka North, Chattogram, Narayanganj, and Gazipur City Corporations,
within other city corporations and district municipalities, individuals will
have to pay BDT 1,000 per square meter in tax to legalize undeclared wealth on
structures, houses, flats, apartments, or floor spaces. The tax rate will be
BDT 2,000 per square meter for land in these areas. In any other municipality,
the rate will be BDT 850 per square meter for structures, and BDT 1,000 per
square meter for land. In areas not included in any of these categories, the
rate will be BDT 500 per square meter for structures and BDT 300 per square
meter for land.
Regarding
whether the remaining parts of the provision allowing the legalization of black
money will be canceled, NBR Chairman Md. Abdur Rahman Khan told Bonik Barta,
“The entire tax law will be reformed. We have a plan. We will reform it. A part
has been canceled initially. We will work with the National Task Force on
this.”