REHAB seeks scope for undisclosed money investment in housing sector
Business Report
The Real Estate Housing Association of Bangladesh on Wednesday proposed that the National Board of Revenue allow investments of undisclosed money in the housing sector without asking any questions with a lower tax rate.
The proposal was presented on Wednesday during a pre-budget discussion held at Agargaon in the capital.
Md Wahiduzzaman, president of Rehab, and Liakat Ali Bhuiyan, vice president of Rehab, highlighted the current state of the sector during the session.
In a written statement, the organisation urged “reintroducing the previous provision in the Income Tax Ordinance stating that no authority shall raise any questions regarding the source of funds for general buyers when purchasing flats.”
Liakat Ali Bhuiyan, vice president of the organisation, stated, “Expatriates often do not provide a declaration after sending money, which then becomes undeclared or ‘black money.’ If they are not allowed to buy flats with this money, the capital is being siphoned abroad.”
In response, NBR Chairman Abdur Rahman Khan said, “We have been in this culture for 55 years; we will not remain in it anymore.”
Highlighting that it is now very easy to send money from abroad and that the government even provides incentives for using formal channels, he added, “Therefore, expatriates will whiten their money by paying taxes at the regular rate. It cannot be addressed in any other way.”
In the 2020-21 fiscal year, the government introduced a provision allowing the investment of undisclosed money in the housing sector without any questions from authorities.
At that time, while general buyers paid up to 30pc tax, the tax for investing black money was only 10pc.
This provision faced widespread criticism, leading the government to gradually move away from this path.
Currently, there is no opportunity for a reduced 10% tax rate in the housing sector.
Investors must pay the regular tax rate plus a penalty on that tax.
Additionally, the Anti-Corruption Commission (ACC) or any other government agency retains the right to question the source of the invested funds.
In addition to the demand regarding undisclosed money, Rehab’s proposal included reducing existing registration costs for flat or apartment sales as well as providing special incentives to develop a secondary market for housing.
