Investment of undisclosed money to be allowed in stocks, real estate

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FE Report
The government in the national budget for the next fiscal, presented Thursday last, offered an opportunity to legalise undisclosed income through investment in some specific listed stocks, purchase of flats and construction of houses. No question would be asked in case of such investments.
The opportunity to legalise such income through stock market by paying a tax of 10 per cent will be valid for three years, starting from July 01 next. However, no specific rate and time were given in the case of investment of undisclosed money in housing sector.
The government would accept investment of undisclosed income "without any question" provided that a payment of 10 per cent tax is made against investment in stock market 'Finance minister AMA Muhith proposed in his budget speech delivered in the Jatiya Sangsad on the day.
The finance minister justified the opportunity offered to invest the undisclosed money in stock market saying that such investment would " open up opportunities for employment for the common man and economic prosperity".
"People invest their long saved money for buying flats or construction of own house, which they subsequently find it difficult to explain to the income tax department. To address this problem without much pain, I propose to accept the investment incurred for the purchase of flat or construction of house without any question by paying a tax at a specific rate according to the measurement of the flat/house", Muhith said.
"I would like to propose acceptance of undisclosed money without any question during the period from 1 July 2009 to 30 June 2012 provided that a payment of 10 per cent tax is made and it is invested in certain new industries and also in BMRE of units in the same industries and provision of physical infrastructure facilities, shares of listed companies of stock exchange," the finance minister said.
New industries in which investment of undisclosed money will be allowed include agro processing industry (fruits processing, baby corn packaging, fruit juice producing and rubber industry), textiles, spinning, textile machinery, garments, leather goods, toys, furniture, information technology enabled services (ITES), drugs and pharmaceuticals, light engineering, melamine, plastic products, ceramics, sanitary ware, steel, MS rod and CI sheet from iron ore, fertilizer, insecticide, pesticide, computer hardware, petrochemicals, agricultural machinery, boilers, basic raw materials of drugs, chemicals and pharmaceuticals, compressors, ship building, diamond cutting industry, shrimp processing industry, milk processing industry, accumulator and battery industry, tour operators, energy saving bulb producing industry, jute goods producing industry, recycling industry, herbal medicine, basic chemicals and dyes, cosmetics and toiletries, tourism industry, foot wear, MS billet.
Investment of undisclosed income will also be allowed in some physical infrastructure projects. Those are: river or sea-port, container terminals, internal container depot, container freight station, liquefied natural gas (LNG) terminal and transmission line, compressed natural gas (CNG) terminal and transmission line, gas pipe line, flyover, elevated road, mono-rail, underground rail, telecommunications other than mobile phone, large water treatment plant and supply through pipeline, waste treatment plant, solar energy plant.
President of the country's prime bourse, the Dhaka Stock Exchange (DSE), Md. Rakibur Rahman termed the budget as" the most capital market friendly budget the country has ever seen."
"I am extremely encouraged by the opportunity given to invest undisclosed income in share market. This will make the country's share market vibrant," said the DSE president.
He said: "The budget is the way we wanted it to be."
He also praised the government's strategy to woo both local and foreign investors to raise funds from the capital market instead of conventional banking sources.
The capital market never got so much importance before, he said.