Illegal money whitening scope was introduced for the next fiscal year 2020-21 as Finance Minister AHM Mustafa Kamal announced a plan in his budget speech in Jatiya Sangsad on Thursday.
Disclosing his plan for increased revenue generation in the fiscal year 2020-21 against the backdrop of coronavirus-hit economic situation, he said, “Extraordinary time demands extraordinary measures.”
The ongoing crisis caused by the coronavirus outbreak and the ensuing changed economic circumstances demand that the mainstream economy of the country be brought back to track and the people be given the opportunity to resume their economic activities.
“Firstly, regardless of the provisions of any other prevailing law of the land, individual taxpayers will be allowed to disclose any type of undisclosed house property including land, building, flat, and apartment between July 1, 2020 and June 30, 2021 on paying tax at a particular rate on per square meter of the said asset,” Mustafa Kamal said.
He said individual taxpayers will also be able to make any disclosure of undisclosed cash, bank deposits, savings certificates (Sanchayapatra), shares, bonds or any other securities between 1st July 2020 and 30th June 2021 on paying taxes at a rate of 10 percent on the value of the said declaration; and no authority including the income tax authority can raise any question on such declarations.
Secondly, the Finance Minister said, with a view to providing impetus to the stock market, a major hub of economic activity of the country, individual taxpayers can invest money in the capital market between 1st July 2020 and 30th June 2021 and show it in their tax returns on paying tax at a rate of 10 percent on the value of the investment subject to satisfying certain conditions including a lock-in period of three years.
“And no other authority including the income tax authority will raise any question in this regard. When they come into force, these provisions will increase the flow of money into the mainstream economy, generate employment and enhance collection of tax revenue”.
He said the possibility of an impending global economic recession also looms large.
“To face these challenges, we have to formulate and implement our financial policies for the upcoming fiscal year with utmost prudence and foresight.”
On the one hand, he said, the government needs to generate more revenue to finance greater public spending to stimulate demand in the economy, and on the other hand, we need to provide impetus to the economic activities in the private sector.
Proposing the two tax incentive sections in the Income Tax Ordinance, the Finance Minister said, in some cases, lack of adequate knowledge on tax return submission may result in causing mismatch regarding proper declaration of assets owned by a taxpayer in his/her tax return.