The government is considering introducing a special tax window in the FY27 budget to allow undisclosed domestic and foreign-held assets to be invested in selected sectors, as policymakers seek to revive sluggish private investment and mobilise idle capital.
Officials at the National Board of Revenue (NBR) said the proposed measure would allow individuals to legalise undeclared wealth by paying tax at a special rate higher than the rates applicable to regular taxpayers.
The authorities said the higher rate is intended to avoid perceptions of unfairness toward compliant taxpayers while encouraging unreported funds to enter the formal economy.
“The idea is not to reward tax evasion, but to bring idle and undisclosed capital into the productive economy,” a senior NBR official said, requesting anonymity.
The proposal comes as Bangladesh faces weak private investment, persistently high inflation and elevated lending rates, factors that have significantly weakened investor confidence in recent months.
Policymakers believe mobilising dormant capital – including assets kept abroad or outside the banking system – could help support economic activity at a time of mounting fiscal and external pressures.
Officials said the initiative has three main objectives – increasing investment flows into the domestic economy, reviving the long-stagnant real estate sector and encouraging the repatriation of offshore assets and undeclared wealth.
The government also hopes the measure will support revenue collection as Bangladesh continues implementing fiscal consolidation commitments agreed with the International Monetary Fund (IMF).
According to NBR officials, the proposal is being considered for two broad categories.
The first relates to foreign-held assets. Individuals who bring back undisclosed money or assets from abroad and invest them in designated sectors may be allowed to legalise those funds through payment of a fixed tax at a special rate.
Officials said the rate would remain higher than the rate paid by compliant taxpayers to preserve the integrity of the tax system.
The second category focuses on the struggling real estate sector.
Undisclosed money invested in residential apartments, commercial buildings or industrial establishments may qualify for the facility. However, the applicable tax rate is expected to vary depending on the source of funds, the type of investment and geographic location.
Investments in Dhaka and Chattogram are likely to face higher rates than those directed toward industrial zones or economic zones.
Officials also said fresh incentives are being considered for selected production-oriented industries listed under the Sixth Schedule of the Income Tax Act, including agro-processing, light engineering and export-oriented sectors.
Bangladesh has introduced similar black money whitening schemes multiple times in the past, although previous initiatives drew criticism for allowing tax evaders to legalise funds at rates lower than those paid by compliant taxpayers.
Economists said such policies risk undermining tax discipline and public confidence in the fiscal system.
“If you consistently reward those who evade and penalise those who comply, you send a deeply corrosive message,” former World Bank Dhaka office Lead Economist Dr Zahid Hussain said.
Officials said the government is attempting a more calibrated approach this time by imposing comparatively higher tax rates and limiting the facility to productive sectors rather than offering a blanket amnesty.
However, some economists warned that even targeted schemes could encourage expectations of future amnesties and weaken long-term tax compliance culture.
The FY27 national budget is scheduled to be placed in Parliament on 11 June.
