The government is likely to impose restriction on the withdrawal of 'undisclosed' funds to be invested in the stock market, at least, for two years.
Officials said the government is considering imposing the restriction with a view to checking the entry of the fly-by- night investors under the government-announced money-whitening provision.
Turnover at the Dhaka Stock Exchange (DSE) stood at Tk 9.37 billion Wednesday, the highest since April 11 last, following the announcement on the money whitening scheme through investment in capital market.
The National Board of Revenue (NBR) officials said the opportunity of investing undisclosed income in the share market by paying 10 per cent tax might be valid for the next two years, until June 30, 2013.
They said to avail the government offered opportunity an investor might be required to keep the original amount of investment in the capital market for two years.
The officials were not ready to call the restriction as 'lock-in' since the investors would take out their profit or investment in excess of the investment of undisclosed fund. An investor will have to keep in his or her BO (beneficiary owner) account an amount equivalent to the undisclosed money invested originally.
They said the terms and conditions of the black money whitening scheme will be finalised today (Thursday). The income tax wing of the NBR has prepared a statutory regulatory order (SRO) in this connection with some conditions, which is yet to get approval of the Finance Minister.
The finance minister Tuesday announced the provision of declaring undisclosed income in the capital market paying 10 per cent tax. He also kept a provision for investing money in the government's treasury and investment bonds.
People, who will invest their white money in capital market and treasury or infrastructure bonds, will enjoy 10 per cent tax rebate on the invested amount.
Former Chief Economist of the Bangladesh Bank (BB) and Director General of the Bangladesh Institute of Development Studies (BIDS) Dr Mustafa K Mujeri said the opportunity will increase investment flow in the capital market. He, however, stressed on the need for addressing the major weaknesses of the capital market on priority basis.
"Normalcy can be brought back in the capital market by injecting black money. But, the weak points of the market should not be ignored," he told the FE Wednesday.
"Offering black money whitening scheme is not morally acceptable, but the government has made the compromise considering the present context," he added.
Former Finance Adviser Dr A B M Mirza Azizul Islam strongly opposed the recent decision of giving the opportunity to whiten the undisclosed income, saying "it is not acceptable in any form."
He said discrimination between honest taxpayers and black money holders will not go away through the tax rebate system.
"It is unacceptable either from moral or economic point of view. Still the government is offering the facility almost every year," Dr. Aziz said.
The government never received satisfactory response from the undisclosed money holders in the previous offers, he said.
"It is rather an incentive for acquisition of black money. Taxpayers will be encouraged to evade tax and whiten the undisclosed money after a certain period of time by paying tax at reduced rates," he added.
http://www.thefinancialexpress-bd.com/more.php?news_id=141096&date=2011-06-30
Officials said the government is considering imposing the restriction with a view to checking the entry of the fly-by- night investors under the government-announced money-whitening provision.
Turnover at the Dhaka Stock Exchange (DSE) stood at Tk 9.37 billion Wednesday, the highest since April 11 last, following the announcement on the money whitening scheme through investment in capital market.
The National Board of Revenue (NBR) officials said the opportunity of investing undisclosed income in the share market by paying 10 per cent tax might be valid for the next two years, until June 30, 2013.
They said to avail the government offered opportunity an investor might be required to keep the original amount of investment in the capital market for two years.
The officials were not ready to call the restriction as 'lock-in' since the investors would take out their profit or investment in excess of the investment of undisclosed fund. An investor will have to keep in his or her BO (beneficiary owner) account an amount equivalent to the undisclosed money invested originally.
They said the terms and conditions of the black money whitening scheme will be finalised today (Thursday). The income tax wing of the NBR has prepared a statutory regulatory order (SRO) in this connection with some conditions, which is yet to get approval of the Finance Minister.
The finance minister Tuesday announced the provision of declaring undisclosed income in the capital market paying 10 per cent tax. He also kept a provision for investing money in the government's treasury and investment bonds.
People, who will invest their white money in capital market and treasury or infrastructure bonds, will enjoy 10 per cent tax rebate on the invested amount.
Former Chief Economist of the Bangladesh Bank (BB) and Director General of the Bangladesh Institute of Development Studies (BIDS) Dr Mustafa K Mujeri said the opportunity will increase investment flow in the capital market. He, however, stressed on the need for addressing the major weaknesses of the capital market on priority basis.
"Normalcy can be brought back in the capital market by injecting black money. But, the weak points of the market should not be ignored," he told the FE Wednesday.
"Offering black money whitening scheme is not morally acceptable, but the government has made the compromise considering the present context," he added.
Former Finance Adviser Dr A B M Mirza Azizul Islam strongly opposed the recent decision of giving the opportunity to whiten the undisclosed income, saying "it is not acceptable in any form."
He said discrimination between honest taxpayers and black money holders will not go away through the tax rebate system.
"It is unacceptable either from moral or economic point of view. Still the government is offering the facility almost every year," Dr. Aziz said.
The government never received satisfactory response from the undisclosed money holders in the previous offers, he said.
"It is rather an incentive for acquisition of black money. Taxpayers will be encouraged to evade tax and whiten the undisclosed money after a certain period of time by paying tax at reduced rates," he added.
http://www.thefinancialexpress-bd.com/more.php?news_id=141096&date=2011-06-30
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