Govt likely to offer tax compliance window for undeclared assets

The BNP government is likely to propose a new legal provision requiring individuals to disclose previously undeclared investments or property transactions and pay applicable taxes, along with a 20 percent penalty on the undisclosed amount, as part of efforts to strengthen tax compliance.

The proposal will be placed in Parliament on Thursday by Finance Minister Amir Khosru Mahmud Chowdhury in his budget for the 2026-27 fiscal year aiming to advance Bangladesh's transition towards a more investment-driven and "trillion-dollar economy" through higher growth targets, regulatory reforms and expanded fiscal measures, reports UNB.

The total outlay of the budget is likely to be set at Tk 9.38 lakh crore, the largest national budget in the country's history.

This will be the first budget of the BNP government this time following a landslide victory in the parliamentary election held on February 12 this year.

According to Finance Division officials, the budget is being prepared under the broad theme of "Economic Democratisation and Deregulation: Bangladesh's Journey Towards a Trillion-Dollar Economy."

The special proposal has been incorporated into a new section titled"Disclosure of Undeclared Investment"under the Income Tax framework.

According to the draft provision, no individual will be questioned by any authority regarding the source of funds used for previously undisclosed investments or property purchases, provided they voluntarily disclose the investment and pay the required taxes.

It covers transactions involving the purchase or sale of land, buildings or apartments where the actual transaction value exceeds the value stated in official documents.

In the case of property purchases, if the actual purchase price is higher than the declared deed value, the taxpayer will be allowed to legalise the undisclosed additional amount by paying income tax under existing rules.

Similarly, where the actual sale price of land, buildings or apartments exceeds the amount recorded in documents, the seller will be required to pay income tax on the undeclared portion of the proceeds.

However, the draft law stipulates that taxpayers availing themselves of the disclosure facility must also pay an additional tax equal to 20 percent of the undisclosed excess purchase or sale amount.

The undisclosed income regularised under the provision must be reported in the taxpayer's income tax return under the schedule relating to "sources of funds and accumulated assets."

The proposed facility will not apply if the taxpayer is already facing legal proceedings or investigations in Bangladesh or abroad over a predicate offence, including money laundering or other criminal activities linked to the undisclosed assets.

The measure is part of the government's broader efforts to bring untaxed wealth into the formal economy while maintaining safeguards against the legalisation of proceeds derived from criminal activities.