The New Nation - Internet Edition

Staff Reporter

Responding to the businessmen plea the government is likely to allow legalising of undisclosed money in the next budget with a minimum penal tax of 7.0 per cent over the normal tax rate, informed sources said.

Sources said the special offer of legalising money may remain for four months from July to October of the next fiscal year. However, the time span could be changed, the sources said.

The National Board of Revenue (NBR) has taken the decision to offer the opportunity of legalising undisclosed money despite opposition within the government, sources added.

The apex trade body, FBCCI, in its budget proposal has requested the government to allow legalising of lawfully earned undisclosed money so that huge money can come into the formal chain. They also urged the government to allow the undisclosed money to be invested in some job-creating industrial sectors without any penalty.

Economists believe that hundreds of billions of Taka remains in the informal chain and could not contribute to the economy. They consider that allowing of those money will put a positive impact to uplift the country's economy.

Businesses think that lot of people will avail the opportunity of legalising undisclosed money boosting the Government's exchequer.

Last year the Caretaker Government offered the opportunity of legalising undisclosed income for four months from June to September. Then people had to pay a penal tax of 5.0 per cent plus normal tax rate to avail the opportunity.

Only Tk 52.13 billion undisclosed income was 'legalised' last year from which the Government earned an extra tax of Tk 8.02 billion. NBR officials said last year's initiative failed to attract handsome amount of money.

Last year only 42,459 people availed the opportunity. Big fishes did not respond to the special offer; only people belonging to the middle-income group responded.

NBR sources said this year's special offer to legalise undisclosed money will be only for those who earned money legally but have not disclosed those in any form. Ill-gotten income which was earned through corruption or crimes such as smuggling will not enjoy the opportunity, they said.