Suspected tax dodgers are taking refuge to black money whitening provision to escape National Board of Revenue's (NBR) move to reclaim untaxed wealth.
Some Tk 500 million has been whitened through this process during the last couple of months to avoid fine and recalculated tax, sources confirmed.
A growing number of Tax Identification Number (TIN) holders are resorting to this unique technique just when the NBR officials are about to complete necessary procedures to challenge the tax evaders.
"Nearly Tk 500 million has been legalised during the last couple of months after the income tax department became certain about the tax evasion by many TIN holders," NBR chairman Khairuzzaman told the FE Monday.
Most of the TIN holders, who are applying such innovative ploy, did not submit income tax returns as per October 31 deadline. They are among the 31,000 TIN holders who sought time petition.
Such moves by the suspected tax evaders and black money holders are preventing the NBR from realising substantial amount of money in the form of fine and recalculated tax.
But it is leading to interesting clues about the country's black money holders other than industrialists and traders.
"Some people feel encouraged to legalise black money, using the existing facility to pay 7.5 per cent tax," added the NBR chairman.
Sources in the NBR said a law expert, who is handling at least two cases in favour of a banned Pre-Shipment Inspection company against NBR and its chairman, has whitened Tk 4.0 million recently.
It is clear that the law expert utilised the provision to dodge some serious tax evasion allegations and used a fake TIN to whiten the undisclosed wealth.
Besides, a physician legalised some Tk 100 million after the income tax department found substantial evidences of tax evasion against him last month, they added.
The NBR officials hoped that such trend will increase in the coming months especially at the end of the current fiscal year.
Earlier, some Tk 1.0 billion was legalised during July-September period after the fiscal year has been declared as the last opportunity for whitening black money.
The government this year offered last chance for people to clean their 'dirty' money despite criticism from various quarters.
The NBR officials believe that illegal money worth about Tk 10 billion might be declared in the remainder of fiscal 2005-06. The sum would be more than half of total illegal money declared in the past three fiscals.
As present, the four-party alliance government re-introduced black money whitening provision in 2002-03 after a gap of one year. Some Tk 17.75 billion worth illegal money was legalised.
Economists and industrialists observed that the provision of legalising black money was only helping money laundering by dishonest people.
In the past 34 years, such steps were offered six times for a total of eight years. During the eight years, only Tk 36.95 billion worth black money was invested in the real economy.