Under the pressure of the ill-gotten wealth earners, Finance Minister AMA Muhith has once again offered fiscal amnesty to ‘black money’ in the upcoming budget.
Muhith said in the parliament on Saturday that the next budget (2014-15 fiscal) would allow legalising black money in two areas including real estate investment.
“Opportunity of legalising the undisclosed income will be available in the budget for the fiscal 2014-15 on payment of 10 per cent penalty beside payment of normal tax,” he said.
He, however, withdrew the opportunity to legalise money for investment in treasury bonds due to its poor response.
A day after proposing the budget before the parliament on June 5, Muhith said the upcoming budget would not offer any amnesty to legalise black money.
“I tell you that the provision is hereby cancelled from today,” he said at a crowded post-budget press conference on June 6.
Before this, the finance minister also categorically ruled out of offering such provision in the budget during several pre-budget consultative meetings with the stakeholders, economists, business community leaders, the National Board of Revenue (NBR) and the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI).
“But, finally, he (Muhith) retrieved from his previous stance facing immense pressures from the businessmen-cum-political leaders inside the ruling Awami League,” a senior NBR official told The New Nation yesterday on condition of anonymity.
He added: We don’t see any justification of keeping such provision in the budget once again when it was drawing very little response from the undisclosed income holders.
The NBR official further said, the revenue board kept the provision of whitening the black money in the outgoing fiscal expecting a higher tax collection from the scheme. “But our hope has become paler due to people’s poor response to avail of the facility,” he said.
Meanwhile, economists, who were always vocal against such amnesty scheme, in their immediate reaction said yesterday that the amnesty offered to whitening black will open the doors for corruption and further delay the process of reducing the size of black economy to make the society free of corruption.
The ruling Awami League (AL) had pledged in its election manifesto to promote good governance and containing corruption. Zero tolerance was the catchiest word to bring meaningful ‘changes’ in the functioning of the state apparatus if elected to the power.
They said, AL government is now in power but things have not chanced much. And instead of containing corruption it putting extra-incentive to corruption by allowing whitening this back money.
Terming the amnesty offer to black money “meaningless” Dr Taslim Ahmed, Chairman, Dept of Economics, Dhaka University questioned the government’s such offer.
“It will not bring any positive outcome on both the economy and the government’s revenue earnings as I think the undisclosed income holders will remain shy as usual to bring their illegal income into investment,” he added.
Criticizing the finance minister for giving the opportunity once again, he said, he (Muhith) took strong stance against the scheme before announcement of the budget and even he said in the parliament that he would not give fiscal amnesty to black money this time. “But unfortunately he offered the scheme again retrieving from his earlier stance ultimately bowing down to the pressure from his party men, ” he said.
He further said, the politicians have already amassed huge illegal wealth from various sources for the last couple of years and the finance minister only offered the faculty to legalise their ill-gotten money.
Terming the scheme as unconstitutional, unethical and discriminatory, former Bangladesh Bank Governor Dr Salehuddin Ahmed said, “Such unethical scope actually encourages corruption and discourages honest tax payers. Besides, whitening of illicit money is an example of moral degradation and does not boost the country’s economy at all.
He also said, black money holders were least interested to avail of the facility offered by the governments time and again because the illicit income holders did not feel safe in doing so in apprehension of accountability in the event of changes of the government policies.
To me, the scheme will not yield any positive result this time and the money of the illegal income holders may not come into the mainstay of the economy.
Between fiscal 1971-72 and fiscal 2012-13, about Tk 13,808 crore was whitened. During the period, the NBR received Tk 1,455 crore as taxes, which is less than one percent of the revenue collection target for fiscal 2014-15.
