B Mirror Report: The government is considering reintroducing the controversial facility to legalise undisclosed income, commonly known as “black money whitening,” in the upcoming national budget, particularly for the housing sector and more than 20 other industries, officials familiar with the discussions said.
Finance Ministry sources told to media that the proposal, which may include indemnity protection shielding investors from scrutiny over the source of funds, is being reviewed as a possible measure to stimulate investment and support economic activity.
An NBR senior official said discussions are ongoing regarding the structure of the facility, including tax rates and implementation methods, but no final decision has been taken.
The scheme was earlier withdrawn by the interim government following strong criticism from economists and civil society groups, who termed it discriminatory and unethical. It had previously been introduced during the former Awami League administration.
Officials said the proposed version may include full indemnity, meaning no government agency would be able to question the source of invested money. Some officials argue such protection is necessary to encourage participation even at reduced tax rates.
The proposal also includes reintroducing tax holiday-style incentives for more than 20 sectors, including pharmaceuticals, API, agriculture, agricultural machinery, manufacturing, textiles, electronics and other industrial areas. These incentives were withdrawn in the last budget.
Officials said the aim is to boost investment, industrial growth and employment amid a slowdown in economic activity. However, details such as tax rates and duration of benefits are yet to be finalised.
The proposal has already drawn criticism from transparency advocates. Transparency International Bangladesh (TIB) Executive Director Dr. Iftekharuzzaman said reinstating the facility would be “self-defeating” for a government committed to anti-corruption reforms, adding that it contradicts constitutional principles and weakens the anti-corruption stance.
Bangladesh has a long history of allowing undisclosed income legalisation schemes. In FY2020–21, around 11,800 individuals legalised about Tk 20,500 crore under a 10 percent tax rate, a move widely criticised for favouring undisclosed wealth holders.
The facility was partially reintroduced in FY2024–25 at a 15 percent tax rate but later withdrawn, particularly removing indemnity provisions.
At present, undisclosed income can be declared by paying up to 30 percent tax plus penalties, but without protection from investigation by agencies such as the Anti-Corruption Commission.
Officials also said broader tax holiday incentives may return for sectors such as pharmaceuticals, electronics, agriculture, machinery, robotics, AI-based systems, nanotechnology, textiles and automotive components, though the final framework is still under review.
Business leaders say such incentives could help revive investment, while economists caution that frequent policy changes may undermine investor confidence unless backed by consistent and well-designed reforms.
