The National Board of Revenue may soon reinstate a tax concession for fish farming, which was withdrawn 10 months ago.

The concession was cancelled amid allegations that some taxpayers were abusing the clause to evade taxes by attributing other incomes to fish farming.

However, the new rules will make the first Tk 10 lakh income from the sector tax-free. Also, 5 percent tax is likely to be imposed on the income between Tk 10 lakh and Tk 20 lakh. 

The new facility will apply to fish farming as well as poultry and shrimp hatcheries.

The tax rate will increase to 10 percent for earnings above Tk 20 lakh from the sector, an NBR official said, asking not to be named.

The notification for these changes in the tax regime will be issued soon and will be retroactive to July 1 this year, the official added.

The clause for the reintroduction of the privilege was also included in the budget for the current fiscal year.

The original concession -- 3 percent tax on any amounts of income -- was offered for two years beginning in July 2013 to encourage diversification and boost production of protein. But some businessmen, politicians and even government officials abused the privilege.

The abuse was tricky to catch as it is difficult to assess fish stocks in ponds, which made it easy for corrupt people to claim any amount of income from fish farming.

The abuse went so far that even people who did not own fish farms claimed income from the business to evade taxes, taxmen said.

The reintroduction of the tax facility will create money-whitening scope for people with undisclosed incomes, said Syed Md Aminul Karim, a former member of the income tax department at the NBR.

 "Regular taxpayers will be discouraged," he said.

The NBR is also set to declare incomes up to Tk 20 lakh from poultry and duck farming as tax-free.

The tax rate will be 5 percent for incomes up to Tk 30 lakh for the sector, and some 10 percent tax will apply to any income above that.