The finance bill for the fiscal year 2021–22 was approved in Jatiya Sangsad on Tuesday with the provisions for legalising undisclosed money and properties kept amid opposition from lawmakers.

The approved bill also contains fresh provisions for investment of undisclosed income in new industries at a 10 per cent income tax, reduction of proposed corporate tax on mobile financial services and easing import of industrial raw materials worth less than Tk 5 lakh. 

Finance minister AHM Mustafa Kamal accepted 14 out of the 62 amendments proposed by treasury and opposition bench members. The bill was approved in a voice vote during the brief JS session.

The minister did not clarify the reasons for the provision for investment of undisclosed money in new industries.

Jatiya Party chairman GM Quader, taking part in the budget discussion, said that the scope for illegal money investment was contrary to good governance.

Attempts to attract higher private investment by providing such facility have already proved wrong, he said.

Bangladesh Nationalist Party lawmaker Rumeen Farhana criticised budget proposals saying that the government was exploiting National Board of Revenue officials to impose higher taxes on the middle-class people and allowing illegal money owners to go scot-free.   

Former World Bank Dhaka Office chief economist expressed reservation about the provision for using undisclosed money in new investments at a 10 per cent tax.

Entrepreneurs, he noted, mainly rely on bank loans or on share market to float a new venture.

For the next fiscal year, investment of undisclosed money in shares or government securities would require a 5 per cent extra tax in addition to the regular 25 per cent tax following the amendments.

The penalty rate would increase to 10 per cent if any investor withdraws investment in less than one year of making the investment.

The undisclosed money holders will also have to pay a 5 per cent extra tax to buyland, buildings and apartments in addition to paying Tk 300 to Tk 5,000 per square metre based on locations.

Following the demand from the mobile financial service providers, the government has reduced the corporate tax on MFS to 30 per cent from the proposed 40 per cent for non-listed companies and 37.5 for listed companies.

The government has also met another demand from businesses by cancelling the requirement of payment through cheques for the import of industrial raw materials valued less than Tk 5,00,000.

Mustafa Kamal thanked prime minister Sheikh Hasina for explaining the government efforts to tackle the Covid pandemic.

Unlike many countries, Bangladesh has not faced negative growth in its gross domestic product despite the virus outbreak, he said.

The finance minister has set the earning target for the National Board of Revenue at Tk 3.3 lakh crore in the new fiscal year against the overall expenditure target of Tk 6.03 lakh, resulting in a 6.2 per cent budget deficit.

He said that the government had increased the budget deficit in order to make more public investment for the benefit of the majority people.