Kazi Zahidul Hasan :
As the government is finalizing the new budget for the fiscal 2016-17, business leaders, including the realtors, are bringing pressure to continue the provision of whitening black money in the next budget.
But the economists are opposed to such ‘fiscal indiscipline’ any more and said that it may open a floodgate of undisclosed income in the economy dumping the honest taxpayers who adhere fiscal discipline.
“I have always opposed the scope for whitening black money as it is immoral”, former Finance Adviser to a caretaker government Dr AB Mirza Azizul Islam told The New Nation on Friday.
He said, instead of continuing this year after year, the government should give a permanent pause on the scope, while sources of black money should be identified and blocked.
“If it cannot be verified whether an amount of money is earned through legal ways or not, what’s the logic behind giving the scope?” he argued.
Mirza Aziz further said that the government should give no scope for whitening black money in the upcoming budget as such a scope
will open up the floodgates of black money or undisclosed income in the economy.
“I oppose it from all perspectives, in terms of social justice, economic justification and political culture,” distinguished fellow of the Centre for Policy Dialogue (CPD) Debapriya Bhattacharya told The New Nation yesterday.
He said, the money-whitening opportunity is given almost every year but it never brought the government any substantial revenue. Even it also failed to bring illegal wealth into the mainstream economy.
“Those who advocate for the provision to bring illegal wealth into the mainstream economy have no data to back them up. The reality is there is no evidence that such big liberal provisions brought big amount of investment.
Rather, it creates a culture of tax evasion, which, in turn, is an unjust punishment to honest tax payers,” Bhattacharya added.
Referring to a figure, he said, the history of this controversial privilege provides an even bleaker picture. Between 1972 and 2013, around Tk 13,808 crore was whitened, with the NBR receiving taxes worth Tk 1,455 crore.
The highest amount of taxes on black money or undisclosed income came to the public exchequer during the 2007-09 period of the army-led caretaker government when Tk 9,683 crore was disclosed which yielded Tk 914 crore in taxes.
As the controversial privilege did not yield much benefit to the mainstream economy, he said, the government should not bow down to any pressure from the business community and give up the fiscal measure for ever.
“I do not see any justification of providing the facility once again when it received poor response from the black money holders,” lead economist World Bank’s Dhaka office Dr Zahid Hussain told The New Nation yesterday.
He added, “The facility has nearly become a permanent feature of the fiscal incentive regime in Bangladesh, but there was hardly any evidence of substantial revenue being earned in the past because of such a policy”.
Opposing the amnesty on black money in the real estate sector, Dr Zahid Hussain said the sector had not only generated more illegal wealth in the past, but also pushed up property prices over the years.
“It is an unproductive sector and the economy will not get any benefit from such an amnesty on black money in it,” he added.
As the government is finalizing the new budget for the fiscal 2016-17, business leaders, including the realtors, are bringing pressure to continue the provision of whitening black money in the next budget.
But the economists are opposed to such ‘fiscal indiscipline’ any more and said that it may open a floodgate of undisclosed income in the economy dumping the honest taxpayers who adhere fiscal discipline.
“I have always opposed the scope for whitening black money as it is immoral”, former Finance Adviser to a caretaker government Dr AB Mirza Azizul Islam told The New Nation on Friday.
He said, instead of continuing this year after year, the government should give a permanent pause on the scope, while sources of black money should be identified and blocked.
“If it cannot be verified whether an amount of money is earned through legal ways or not, what’s the logic behind giving the scope?” he argued.
Mirza Aziz further said that the government should give no scope for whitening black money in the upcoming budget as such a scope
will open up the floodgates of black money or undisclosed income in the economy.
“I oppose it from all perspectives, in terms of social justice, economic justification and political culture,” distinguished fellow of the Centre for Policy Dialogue (CPD) Debapriya Bhattacharya told The New Nation yesterday.
He said, the money-whitening opportunity is given almost every year but it never brought the government any substantial revenue. Even it also failed to bring illegal wealth into the mainstream economy.
“Those who advocate for the provision to bring illegal wealth into the mainstream economy have no data to back them up. The reality is there is no evidence that such big liberal provisions brought big amount of investment.
Rather, it creates a culture of tax evasion, which, in turn, is an unjust punishment to honest tax payers,” Bhattacharya added.
Referring to a figure, he said, the history of this controversial privilege provides an even bleaker picture. Between 1972 and 2013, around Tk 13,808 crore was whitened, with the NBR receiving taxes worth Tk 1,455 crore.
The highest amount of taxes on black money or undisclosed income came to the public exchequer during the 2007-09 period of the army-led caretaker government when Tk 9,683 crore was disclosed which yielded Tk 914 crore in taxes.
As the controversial privilege did not yield much benefit to the mainstream economy, he said, the government should not bow down to any pressure from the business community and give up the fiscal measure for ever.
“I do not see any justification of providing the facility once again when it received poor response from the black money holders,” lead economist World Bank’s Dhaka office Dr Zahid Hussain told The New Nation yesterday.
He added, “The facility has nearly become a permanent feature of the fiscal incentive regime in Bangladesh, but there was hardly any evidence of substantial revenue being earned in the past because of such a policy”.
Opposing the amnesty on black money in the real estate sector, Dr Zahid Hussain said the sector had not only generated more illegal wealth in the past, but also pushed up property prices over the years.
“It is an unproductive sector and the economy will not get any benefit from such an amnesty on black money in it,” he added.
