Dhaka: The government is considering a special tax amnesty in the upcoming national budget for the fiscal year FY2026-27, allowing individuals to whiten undisclosed money and assets held both domestically and abroad. This move is aimed at revitalizing private sector investment and channeling idle capital into the mainstream economy.
According to United News of Bangladesh, the national budget for FY 2026-27 is scheduled to be presented in Parliament on June 11. During pre-budget discussions in April, the Real Estate and Housing Association of Bangladesh (REHAB) urged the government to permit flat purchases without inquiries into the source of income. REHAB advocated for the reinstatement of the former provision of the Income Tax Ordinance to stimulate investment in the housing sector.
The practice of legalizing untaxed income has a longstanding 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 surpassed in FY 2020-21 when Tk 20,500 crore was whitened by 11,839 individuals under a 10 percent tax rate, generating Tk 2,064 crore in revenue for the National Board of Revenue (NBR).
Subsequent budgets have also offered similar amnesties. In FY 2021-22 and FY 2023-24, a 7.5 percent tax rate was available 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, ensuring total immunity from legal scrutiny.
While the interim government initially introduced measures to allow investment of undisclosed money in real estate, it faced criticism from economists and civil society. Consequently, the government adjusted the policy by raising tax rates based on property location and size. For flat purchases, area-specific taxes ranged from Tk 100 to Tk 2,000 per square foot across Dhaka, Chattogram, other divisional cities, and municipalities. For building constructions, the tax ranged from Tk 50 to Tk 900 per square foot.
NBR officials suggested that the forthcoming policy might follow a structured framework, offering specific investment windows to incorporate domestic and foreign undisclosed assets back into the formal financial system. However, economists caution that such recurring amnesties could create moral hazards, imposing pressure on honest taxpayers and potentially generating undisclosed money through complex procedures, especially in remittance channels or fixed asset sales.