Bangladesh's tax intelligence moved to dig out data on former land minister Saifuzzaman Chowdhury's wealth from the UK property-licensing authority to claim tax on it as the current hunt for siphoned-off assets gets going.
Armed with provisions of the Income Tax Act 2023, the Central Intelligence Cell (CIC) of the National Board of Revenue last Tuesday sent a letter to its International Taxation wing requesting to proceed towards the Ministry of Foreign Affairs in this regard.
Also, a delegation from the British High Commission in Bangladesh visited the NBR last week to extend its cooperation on tax recovery by Bangladesh.
Officials have said an expert team of the high commission is scheduled to visit the revenue board next week again to discuss mutual assistance.
The CIC's move came following a report of Al Jazeera that Saifuzzaman has assets worth over US$ 500 million in the United Kingdom.
A senior tax official says the income-tax law empowers taxmen to demand taxes equivalent to the value of off-shore property in case of concealment in the tax file.
"We have a plan to claim tax on the properties of the former lawmaker to the UK tax authority," he adds.
As a citizen of Bangladesh, the ex-minister is supposed to pay taxes on his income generated in Bangladesh and abroad, he points out.
The CIC has got permission from NBR chairman Abdur Rahman Khan to proceed on the tax recovery from the minister of the now-deposed government.
The tax sleuths are raking over data on UK websites, including Company House and Land Registry, to know about the immovable- property ownership of Saifuzzaman Chowdhury.
In a notable case, Chowdhury is alleged to have failed to report a large portion of his assets in his tax file. His tax jurisdiction is in Chittagong, his hometown. The CIC has collected his tax file for scrutinising his financials following the recent report on Al Jazeera.
According to provisional findings in his tax files in Bangladesh, taxmen found Tk 1.9 million paid taxes on a declared income of Tk 7.4 million while he holds a total wealth of some Tk 180 million.
His assets include shares valued Tk 9.6 million, fixed deposits and securities worth Tk 3.25 million, and non-agricultural income of Tk 100 million. He has shown loans worth Tk 70 million in the tax file.
However, tax officials discovered he only reported one of two cars under his name--a violation of tax laws.
Bangladesh has Double Taxation Avoidance (DTA) treaty with the UK to share information of taxpayers of the respective countries.
However, tax officials have found the exchange- of-information clauses in the treaties not well-defined to seek data on taxpayers of Bangladesh.
The DTA has a clause titled 'cooperation on collection of taxes' which could be used to collect information from other countries, they have said.
A Bangladesh Bank official says the DTA empowers authorities to seek specific information of a taxpayer, bar access to wholesale data on citizens of a country.
CIC officials have said taxmen do not have the prosecution authority against taxpayers on asset-recovery issues.
"We will investigate and claim tax while Bangladesh Financial Intelligence Unit (BFIU) and the Anticorruption Commission (ACC) will work on next punitive measures," the tax official says about the overlapping jurisdiction.
Dr Masrur Reaz, founder-chairman of the Policy Exchange Bangladesh, however, suggests that the government work in a coordinated way to recover country's stolen asset.
"The taskforce on asset recovery, formed by the Financial Institutions Division of the Ministry of Finance, should work for this rather than isolated steps by each of the entities in this regard," he says.
The taskforce on asset recovery, reconstituted for the fifth time on September 29, 2024, has not incorporated any official from CIC, income tax or VAT department, but customs intelligence.
Dr Masrur says there must be representation of CIC officials in the taskforce as recovery of siphoned asset has multiple legal aspects that would need government-to-government cooperation.
Asset recovery in the form of taxes has successful case histories worldwide. Usually, asset recovery is time-consuming and costly move of a government but tax recovery from the siphoned asset is relatively easier.
BFIU data show the United States recovered $6.5 billion in taxes with penalty and interest from 45,000 taxpayers in the 2009-2023 period under its Offshore Voluntary Disclosure Program.
France has repatriated its stolen asset worth 1.2 billion euros and Italy 570 million euros, the UK 150 million pounds and Spain 210 million euros as tax from its taxpayers having secret accounts in Swiss banks.
Germany recovered 1.60 billion euros worth of taxes in 2010 on the basis of tips on secret bank accounts of its taxpayers from Swiss Liechtenstein bank in Switzerland.
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