IN post-budget reaction Transparency International Bangladesh (TIB) on Friday demanded the government to make clear its stance on whitening the black money. In the statement, TIB decried the opportunity saying allowing the whitening of black money is contrary to the basic principle (Section 20(2) of the Constitution), violative of tax justice and meaningless from the perspective of revenue collection. People tend to believe that powerful persons are at work to force the Finance Minister every time to give advantage of whitening the black money earned illegally by way of corruption. Finance Minister AMA Muhith on Sunday said there was no scope for legalising undisclosed money in the new budget as recently as April 5, apparently suggesting that he had to make the provision for it under pressure from vested interest quarters. One can remember that he had said the same thing when announcing the budget for 2014-15 and the years before, but not stopping it any way.Black money is simply money earned by individuals but not disclosed to the government. It can be earned by performing both legal or criminal activities. NBR figures show people whitened around Tk 13,808 crore between fiscal 1971-72 and fiscal 2012-13 with the National Board of Revenue (NBR) receiving taxes of Tk 1,455 crore during the period, which is just around 1 per cent of this year’s collection target.The Tax Justice Network (an international think-tank) considers money protected under tax evasion as black money. People may say it’s just ‘corruption or bribery’ money that the government wants to bring back to the formal channel by way of whitening. The common perception in Bangladesh is that big businesses and powerful persons who operate under the shelter of political establishments are routinely hoarding money or laundering it out of the country. They are siphoning financial institutions or exploiting government contacts to make money holding it unreported in personal vaults, if not moved out in secret bank accounts abroad. Black money also spills up in our informal economy as most people keep out of tax net for many reasons, but it is not too big amount at the end. The government that encourages creation of black money has to whiten the black money. But though whiten, the fact is that in the absence of investment climate, the money will not remain in the country.
