Finance Minister AHM Mustafa Kamal has proposed imposing a 50 percent penalty on misdeclaration of exports, imports and investments in overseas countries as the government aims to increase tax revenue and prevent money laundering, according to the budget proposal for fiscal year 2020-21.

The minister, in his budget speech, said, "There are widespread allegations of money laundering and tax evasion through under-invoicing, over-invoicing, and declaration of false investments. In this regard, I propose adding a new section in the Income Tax Ordinance. According to the proposed provision, 50 percent tax will be levied on the proven amount of over- or under-invoicing, or on the proven amount of falsely declared investment. I hope that the proposed provisions will be highly effective in curbing money laundering and tax evasion caused through acts of under-invoicing, over-invoicing, and false declaration of investment."

According to the proposed law, importers, exporters or investors will pay an extra 50 percent in taxes on the proven amounts as penalty if revenue officials find they are laundered.

A top official of National Board of Revenue (NBR), who is working at the anti-money laundering department, told The Daily Star, "This is a positive initiative to increase revenue collection. But preventing money laundering incidents is not possible without implementing the Anti-Money Laundering Act 2012 (amendment 2015)..."

Economist Dr Moinul Islam, former professor of the economics department of Chittagong University, told The Daily Star, "It's difficult to say good or bad without reading the details of the law. But I think that the government will fail to implement this law under pressure of money launderers because none of the laws on money laundering have been implemented so far.

"A strong syndicate has been involved in this due to lack of proper surveillance and with help of customs and bank officials. Unfortunately, there is no visible activity to curb money laundering and majority of such incidents are done in the guise of import-export trade," he said.

The NBR does not have any specific information or any statistic on how much money is being laundered from Bangladesh through over-invoicing and under-invoicing.

US-based think tank Global Financial Integrity (GFI) revealed that Tk 5, 30,000 crore were laundered from Bangladesh in the last 10 years (2006 to 2015).