New rules for black money investment

Star (July 06, 2011)

Black-money investors will have to keep the invested capital in the stockmarket for two years, said an official of the National Board of Revenue yesterday.
If anybody invests black money in the stockmarket from July 1, 2011 to June 30, 2012, he will get scope to whiten the money by paying a 10 percent flat tax, NBR First Secretary Apurba Kanti Das told reporters while highlighting the achievement of the tax administrator in the last fiscal year.
Investors can buy and sell shares of any company and take profits off, but will have to keep the invested capital in the market until June 2013, he said.
The NBR official said those willing to invest legally-earned money in initial public offerings will get a 10 percent tax rebate. The tax administrator had prepared a statutory regulatory order that may be issued in a couple of days, he said.
NBR Chairman Nasiruddin Ahmed said the scope given by the government will have a positive impact on the stockmarket, but that will not help increase revenue earnings.
Ahmed said they will take steps in line with income tax laws if any other government agency seeks information from the NBR about the black money holders who avail themselves of the scope for money whitening.
Das said they will monitor whether anybody is withdrawing the invested black money before the timeframe.
“Higher tax, including fine, will be realised from such investors,” he said.
While taking or after being able to use the scope, a person has to deposit beneficiary account (BO) statement along with his income tax return every year, Das said.
In his budget speech on June 9, Finance Minister AMA Muhith had initially proposed scope for legalising undisclosed money through investment in treasury bonds and infrastructure fund, but not in the stockmarket. He has announced the offer in parliament before passage of the budget.