Published in The Observer on Tuesday, 1 September 2015.
The government’s revenue office is working on formation of a separate Tax Cell to avoid complexities in collecting tax from siphoned off money and stop capital flight, officials said.
Every year more than Tk12,000 crore is going abroad unofficially and the government is being deprived of a huge revenue income, different international agency data show.
A senior official at the National Board of Revenue (NBR) said, “Like many other countries, Bangladesh is going to form an independent cell which will collect tax from foreign lands with simplified process.”
He said the Anti Corruption Commission (ACC) in its asset recovery process maintains a complex process of solving ‘Dual Criminality’ problem.
The official pointed out that when anyone takes away money without proper channel he or she commits a crime and welcoming investment by any country without checking the source of money is another crime.
“So it is difficult to get back money by solving dual criminality but the NBR-led separate tax cell would simplify the process and collect tax,” he said, requesting anonymity.
As per different estimations, Bangladesh is losing a large amount of money as income tax every year which is 1.1 per cent of the Gross Domestic Product or GDP. ACC Commissioner Nasir Uddin Ahmed said, “In our asset recovery drive we have recovered Tk22 crore from different sources and we are working with other government agencies to stop capital flight.”
He said at first it is necessary to stop formation of black money and then it is to control or take back the siphoned off money from abroad.
Ahmed said collective efforts by the central bank, NBR and ACC would help protect the government’s interests of getting tax, to a great extent.
CPD Executive Director Professor Mustafizur Rahman said illicit money flow is a global problem and Bangladesh is not an exception to that.
He said the government is yet to form a strong body to stop illicit financial flow and recover the siphoned-off money. The top official of the Centre for Policy Dialogue further said joint efforts by Bangladesh Bank (BB), ACC and the NBR can control illicit financial flow domestically and take measures that the host countries would not allow investments from Bangladeshis without checking sources.
A BB senior official, who preferred anonymity, said they are finding effective tools that may match with international standards of stopping illicit money flow by various means like price transferring, under invoicing and over invoicing. According to a Swiss National Bank report prepared in 2013, deposits by Bangladeshi nationals in the banks of Switzerland recorded a 62 per cent increase.
A UNDP report also pointed out that every year more than Tk7000 crore is going away from Bangladesh.
There is no local estimation on illicit financial flow but as per different foreign agency estimations it is a large amount of money that is being siphoned off every year. Global Financial Integrity (GFI), a Washington-based research organisation, reported that illicit financial flow from Bangladesh in 2012 was $1.78 billion.