SOME $5.9 billion was siphoned out of Bangladesh in 2015 through trade mis-invoicing, and Bangladesh ranked second in South Asia in terms of illicit outflows of money, the Global Financial Integrity (GFI) said in a report. The Washington-based research and advisory organisation came out with the findings by analysing data of trade in goods of 148 developing countries with advanced economies. The report, based on International Monetary Fund (IMF) data, also said $2.36 billion illegally entered the country in 2015.
This year, the GFI detected the corruption by analysing the trade data on over invoicing and under invoicing. The GFI found Bangladesh was one of the top 30 of countries, ranked by dollar value of illicit outflows in 2015. The GFI data also showed that the amount of IFFs (Illicit Financial Flows) from Bangladesh was 17.5 percent of the nation’s total trade with advanced countries at $33.73 billion in 2015. In its previous report, the GFI said Bangladesh lost $75 billion due to trade mis-invoicing and other unrecorded outflows between 2005 and 2014.
Trade mis-invoicing is a method of moving IFFs, and includes the deliberate misrepresentation of the value of imports or exports in order to evade customs duties and VAT, launder the proceeds of criminal activity or to hide offshore the proceeds of legitimate trade transactions, among other motivations.
It should not be too difficult for the administration to find those who are involved in such activities. Definitely the average firm or individual will have a very difficult time to do so. More attention must be paid to the MNCs (multi-national companies) and to those foreigners living in Bangladesh whether legally or illegally, as well as big local firms who may have the resources to transfer such funds abroad.
The report indicates that almost 8.2 billion dollars either went out of the country or entered the country without any taxes being paid on them — a huge loss to our exchequer. The Bangladesh Bank should employ forensic accountants to ferret out the huge volumes of such transactions — the cost of employing those accountants will be more than made up if we can figure out those doing such activities on a regular basis. We are losing almost 1 percent of our GDP on an annual basis.
