Md. Zillur Rahaman :
Recently, the Finance Minister has proposed in the budget of the fiscal year 2022-23 to allow the money smuggled abroad to be displayed in the income tax return without any question. It has been said that if a taxpayer owns any property outside Bangladesh and that property is not shown in the income tax return, s/he will get the opportunity to show it by paying a fixed tax in the financial year 2022-23. In this case, if the immovable property outside Bangladesh is not repatriated to the country at the rate of 15 percent tax on the fair market value of the property, cash, bank deposits, securities and financial instruments, including all movable assets at the rate of 10 per cent tax and cash, bank deposits, All movable, including securities and financial instruments, he offered to pay 7 per cent tax on the return of the property. This opportunity will be given for one year and it will end on June 30, 2023.
The Finance Minister’s announcement drew mixed reactions from the business community, economists, politicians and well-wishers and they view good traders will be discouraged if money smuggled abroad is brought into the country, that’s what traders don’t want. Although the budget speaks of a tough stance against corruption and good governance, the proposal to launder smuggled black money is not justifiable. This will discourage legitimate taxpayers and legalise money laundering abroad.
The Swiss National Bank (SNB) recently released their annual report. According to the report, in 2021, the amount of money deposited by Bangladeshis in various banks in Switzerland stood at 871.10 million Swiss francs, which is equipment to 8,275 crore in Bangladeshi currency. In the previous year, i.e. in 2020, the amount of this money was Tk. 5,347 crore. The increase is the highest in a year, according to figures from the Swiss Bank’s annual report. According to this calculation, the amount of money deposited by Bangladeshis in Swiss Bank has increased by Tk 2,928 crore in one year. In previous years, the amount deposited by Bangladeshis was Tk 4,058 crore in 2014, Tk 4,417 crore in 2015, Tk 5,566 crore in 2016, Tk 4,069 crore in 2017, Tk 5,553 crore in 2018 and Tk. 5,427 in 2019.
Moreover, according to a report by Global Financial Integrity (GFI), a Washington-based research institute in the United States, an average of US$ 753.37 crore is smuggled from Bangladesh through international trade every year. At a market price of Tk 85 per dollar, it amounts to Tk 63,924 crore. The report paints a gloomy picture of how money is smuggled out of 135 emerging and developing countries over the last 10 years (2008-2017) by showing discrepancies in international trade. There are allegations that money laundering is taking place in this country by showing discrepancies in price declaration in import and export activities. Lately, some such incidents have also been uncovered. According to the report, Bangladesh has an average of 17.95 per cent or about 18 per cent discrepancy in the price declaration of all imports and exports with Bangladesh.
The country’s businessmen, various professionals and politicians smuggle crores of money in different ways. Again, foreigners are taking crores of money from Bangladesh. Bangladeshis are laundering several times more money than foreigners are laundering. Although most foreigners smuggle money in Bangladesh due to the complexity of hiring foreigners, Bangladeshis are planning to smuggle money. Citizens of Bangladesh are smuggling money for two reasons. First, those who are not able to enjoy undisclosed income or black money in the countryare investing in business in different countries as well as building second homes in different countries. Second, Bangladeshis are also smuggling money due to political and administrative weaknesses and in both these sectors; black money is being smuggled through irregularities and corruption.
A study by the Bangladesh Institute of Bank Management (BIBM) found that Bangladeshi businessmen are living in buildings in various countries, including Malaysia, Canada and Singapore, with bank loans. The money of the customers of the bank is being smuggled abroad by various means and they are building a second home there.
Money laundering is mainly due to the wrong policies of the government. In a country where economic activity is almost stagnant, where investment is extremely slow, the surplus money of moneylenders is smuggled abroad. Where there is political uncertainty on the one hand, lack of physical infrastructure on the other hand or inadequate physical infrastructure, money laundering takes place. Traffickers include smugglers and money launderers, garment owners, industrialists, corrupt bureaucrats and politicians. According to economists, if there is no good governance, money will be smuggled. Those involved in money laundering are high-ranking members of society. There is no incentive for them to hold money in the country. First of all, the country has to do better.
If the money earned through illicit means is not smuggled abroad, it plays a role in the economy of the country in one way or another, but whenever this money is smuggled abroad, it does not play any role in the economy of the country but acts as an omen. The wheel of the country’s economy gradually came to a standstill and in the long run it was an ominous sign for the foundation of the country’s economy. It is the responsibility of the government to prevent money laundering through appropriate measures.
(Md. Zillur Rahaman is a banker).
