THE Finance Minister in his postbudget discussion on Friday said that the proposed budget for the year 2014-15 will not provide any opportunity to legalise black money, though the minister mentioned nothing about the controversial provision in his budget speech. Nonetheless, we would like to accept it as a true considerable assertion of the Finance Minister and expect that the decision will compel the vested quarters to bring into the legal taxation system those who have illegal secret money. But we think that merely a public announcement without taking formal measures is unlikely to make any significant dents on black money, which is so large that it is considered a parallel economy.
According to available data, the size of the underground economy, the nursing ground of black money, consists of around 50 percent of the country’s total GDP. In between fiscal 1971-72 and fiscal 2012-13, some Tk 13,808 crore money was whitened, with the NBR receiving taxes of Tk 1,455 crore during this 43-year period, which is just around 1 percent of the revenue target in the proposed budget for the upcoming fiscal. From July last year to April this year, the National Board of Revenue received only Tk 26 crore through money whitening facility. Economists therefore expressed their concern with money whitening decisions as black money invested in the real estate sector during the recent couple of years has turned blacker because the price of the purchased flats or lands was declared much lower in the papers than the actual one in a bid to evade tax. By all counts, the amount so added to the exchequer is too insignificant. But unfortunately no government has been serious about unearthing black money.
Moreover, the proposed budget placed in the parliament on June 5 by itself is such that it provides many loopholes for corruption. It will eventually help in generating black money no doubt. So it is equally important to set the taxation policy to include anti-black money features. The system has been so lenient that tax evaders seldom feel the heat. Honest taxpayers should be encouraged and tax-evaders punished are followed more in principle than in practice. More often than not, income tax raids are conducted on a selective basis demeaning the political and business rivals of those in power. What’s worse, even banks have been found to be helping their customers to evade taxes. The government must use all its punitive powers to deal with tax-evaders and flush out all the unaccounted money.
Undisclosed amnesty to black money in the proposed budget is an attempt to help the leaders and workers of the ruling party and the government functionaries who have amassed huge illegal wealth. We ask the government to take steps to clean the ruling party leaders along with dishonest businesses and public servants who are similarly avoiding declaration of their wealth and avoiding taxes. The issue of black money is easy to talk but difficult to deal with. So, first close the loopholes to create black money by making laws. Otherwise, what the Finance Minister pledged to the nation in his post-budget discussion will just be gossip that we don’t want to believe.
