The government is considering a special tax amnesty in the upcoming national budget for the upcoming fiscal year FY2026-27, allowing individuals to whiten undisclosed money and assets held both at home (Domestic) and abroad, according to the sources of Ministry of Finance.
The initiative aims to break the ongoing stagnation in private sector investment and channel idle capital into the mainstream economy, officials said.
The national budget for FY 2026-27 is scheduled to be presented in Parliament on June 11.
Ahead of the budget, during pre-budget discussions in April, the Real Estate and Housing Association of Bangladesh (REHAB) urged the government to allow flat purchases without any questions regarding the source of income. REHAB demanded the reinstatement of the former provision (Section 19BBBBB) of the Income Tax Ordinance to boost investment in the housing sector.
The opportunity to whiten untaxed income has a long history in Bangladesh, first introduced under martial law in 1975. Since then, successive governments have periodically extended this facility.
During the military-backed caretaker government in FY 2007-08 and FY 2008-09, a record Tk 9,683 crore was legalized. This record was later shattered in FY 2020-21, when an unprecedented Tk 20,500 crore was whitened by 11,839 individuals under a 10 percent tax rate, yielding Tk 2,064 crore in revenue for the NBR.
Subsequent budgets also offered similar amnesties. In FY 2021-22 and FY 2023-24, a 7.5 percent tax rate was offered to repatriate undisclosed offshore assets. In FY 2024-25, a blanket opportunity was given to legalize undisclosed cash, stocks, and investments with a 15 percent tax, offering total immunity from any legal scrutiny.
While the interim government initially introduced measures to allow investment of undisclosed money in apartments and buildings in the last proposed budget, it faced severe backlash from economists and civil society. Consequently, the government modified the approach by continuing the facility but raising the tax rates based on the location and size of the property.
Under that structure, area-specific taxes for flat purchases ranged from Tk 100 to Tk 2,000 per square foot across capital Dhaka, Chattogram, other divisional cities, and municipalities. For building constructions, the tax ranged from Tk 50 to Tk 900 per square foot.
NBR officials indicated that the upcoming policy may likely follow a structured path, offering specific investment windows to legally incorporate domestic and foreign undisclosed assets back into the formal financial framework.
However, economists warn that such recurring amnesties create moral hazards. Speaking to reporters, several prominent economists noted that these provisions impose moral pressure on honest taxpayers, often making them feel helpless.
They, however, acknowledged that procedural complexities sometimes unintentionally generate undisclosed money, particularly through remittance channels or the sale of fixed assets.