Separate cell in NBR to compile data on capital flight

The revenue board is planning to form a separate income tax cell that would monitor the incidence of money laundering, compile data on capital flight and scrutinise the income of individuals holding dual citizenship.
The cell will ensure exchange of internal and external information, coordinate the activities relating to internal intelligence and investigation, collect data on siphoned of money and carry out other international tax-related activities.
The income tax authority recently moved to finalise the structure of the income tax cell at the directives of the finance minister. In his budget speech, Finance Minister AMA Muhith issued directions in this connection.  
In the budget for FY 2015-16, the finance minister pointed out the inadequate capacity of the National Board of Revenue (NBR) for keeping data on siphoned-off money, bringing the money under tax net and examining income of individuals having dual citizenship.
"The board is planning to form the cell. It may be a different unit under the international taxes wing of the revenue board," said a senior tax official.
There is a separate directorate of international taxes in India which may be followed, he said, adding that the existing Transfer Pricing activity of the revenue board is also likely to be handled by the cell.
Currently, there are separate investigation and intelligence wings for Customs and Value Added Tax (VAT), but income tax department has no separate intelligence and investigation wing.
It is carrying out its intelligence activities through the Central Intelligence Cell (CIC).
In 2014, the NBR tried to trace the Bangladeshi citizens who have transferred funds illegally to different countries, including Malaysia, the UAE and Canada.
However, the board could not make any progress due to absence of its legal and administrative capacity to collect information through local High Commissions or Embassies in those countries.
"Money laundering is posing a serious threat to our economy. While different agencies across the world are now effectively working to collect information on money laundering and help impose tax, the NBR is yet to make any significant move regarding money laundering due to legal and administrative weakness and capacity constraints," the finance minister said in his budget speech.
The government has taken a comprehensive plan for the capacity building of NBR for addressing the issue of money laundering and exchange of information for taxation purposes, he added.
Officials said the cell will help build the capacity of taxmen to discharge responsibilities regarding international tax matters.
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