The last day of FY 2020-21 saw sharp increase in the board index of Dhaka Stock Exchange (DSE) due to high investor participation before strict lockdown took effect. There was a gradual market correction early in the day but gradually there was a sharp rise in the DSE Index that the experts believe is due to the continuation of whitewashing of undisclosed income.

Previous attempts at attracting money launderers to whitewash their black money had dawn little attention, however, the new lucrative proposition to whitewash by investing where the source of undisclosed income would be overlooked even by income tax authorities has rallied investors to whiten their money. Previously, black money holders could whiten their money that had not been reported for taxation by investing in residential buildings if it was not from a legitimate source or obtained by criminal activities. In FY 2020-21, any undisclosed income could be whitewashed by paying 5% penalty, 10% tax, and 10% tax on investment for a total of 25% tax, and no questions would be raised to the source of the income provided the investment is in economic zones and hi-tech parks.

These new provisions resulted in the whitening of the highest amount of undisclosed income since the inception of Bangladesh in 1971. Nearly BDT 206 billion was whitewashed in FY2020-21 but only 4 billion were invested in the capital market. According to provisional data of National Board of Revenue (NBR), most of the whitened money was invested in cash, bank deposits, debentures, residential buildings, and land beside the share market. Only around 18.5% of the whitened money was invested in the capital market and real estate while 81.5% of the money was held as cash, deposits or national savings certificates.

The highest amount of this undisclosed income was sourced from government officials- both current and retired and garments owners. In terms of profession, public officials such as doctors, lawyers, and engineers led the historic Bangladesh Whitewash.