This time, the National Board of Revenue (NBR) is stepping up its oversight of the foreign assets held by Bangladeshis by birth, making it more difficult to avoid taxes by accumulating assets overseas. By changing Section 21 of the Income Tax Act, the government has made it possible to include these people in the tax system.
Only “resident Bangladeshis” were formerly eligible to be included by the section. Because of this, a lot of people were moving overseas or even giving up their citizenship in order to avoid disclosing their holdings on their taxes. If someone is found to be a “taxpayer or Bangladeshi by birth” at the start of the next fiscal year, their foreign assets will be investigated and subject to fines.

According to the NBR, attempts are underway to include large taxpayers in the scope of this amendment. The applicable law states that if proof of unreported foreign assets is discovered, it may be looked into and a fine of the appropriate amount may be assessed. The accused’s or his representative’s assets may be seized if required.

NBR sources claim that the phrase “Bangladeshi by birth” was introduced in order to get around the restrictions associated with the term “resident.” Going forward, if you are a Bangladeshi by birth, you will be required to disclose your foreign assets on your income tax return, whether you are a resident or not, or face penalties.

But according to individuals involved, the law’s implementation is currently the largest obstacle. Despite the fact that this clause was established in 2022, there has only been one search conducted in the previous three years.

However, CIC, the NBR’s intelligence unit, has asserted that it has discovered assets from a number of nations. According to income tax specialists, this adjustment can give the law a more realistic structure, but tight implementation is necessary for it to succeed. How to recover from people who have already resigned their citizenship is still up for debate, though.