Govt set to drop proposed property tax amnesty after criticism

The government is set to withdraw a provision from the proposed Finance Bill that would have allowed taxpayers to voluntarily disclose the actual value of land, buildings and apartments that had previously been underreported in registration deeds, sources at the National Board of Revenue (NBR) said.

The move comes after the proposal drew widespread criticism from tax experts and businesses, who argued that it would effectively reward tax evasion and undermine compliant taxpayers, prompting the government to reconsider the measure before the Finance Bill is passed.

The proposed amendment sought to introduce a new provision titled "Voluntary Disclosure of Investment" in the First Schedule of the Income Tax Act. 

The measure would have allowed buyers and sellers of immovable property to regularise discrepancies between the actual transaction value and the value recorded in deeds without being questioned by tax authorities, provided they paid the prescribed taxes.

Under the proposal, individuals who had understated the purchase price of land, buildings or apartments would have been allowed to declare the property's actual value in their income tax returns by paying a 30 percent tax on the difference between the deed value and the actual value. 

Sellers, meanwhile, would have been able to regularise underreported sale values by paying a 15 percent capital gains tax on the difference.

The draft law also stipulated that taxpayers already facing proceedings under the Income Tax Act before making a voluntary declaration would have to pay an additional penalty equal to 20 percent of the tax due. 

Individuals convicted by a Bangladeshi court of criminal offences or facing pending criminal cases before making the declaration would not have been eligible for the facility.

The provision was included in the proposed FY2026-27 budget as part of a broader effort to encourage voluntary tax compliance and bring previously undisclosed investments into the formal economy. 

However, it immediately sparked criticism, with opponents arguing that it would effectively reward those who had deliberately concealed property values while penalising honest taxpayers. Critics also warned that the measure could institutionalise the long-standing practice of understating property values in registration deeds.

Following the backlash, the government is now preparing to remove the provision from the Finance Bill before it is passed in parliament, NBR sources said.