Special Correspondent :
The ruling Awami League government has finally cleared the scope of whitening black money endorsing the provision in the Finance Bill- 2019, which the Parliament approved on Saturday.
Under the scheme, black money holders will not face any questions about the sources of their income if they invest in industrial units in the special economic zones, Hi-Tech Parks as well as for buying residential buildings or flats by paying a tax of only 10 per cent on the amount.
The BNP-led government in fiscal 2003-2004 first offered the opportunity to legalise black money in the industrial sector. But it was rolled back after two years amid criticism from various quarters.
This time, the Awami League government has offered the scope for legalising black money in order to boost private investment that has been hovering between 22 and 23.40 per cent of the GDP in the last several years. Walking back on its electoral pledge to smack a crackdown against the black money holders, the government floated the scheme at a time when corruption takes its own course rapidly expanding the black economy.
“Black economy of Bangladesh is estimated to be around 42-43 per cent of its current Gross Domestic Product (GDP). In monetary figure it would be Tk 17 lakh crore, three times bigger than the country’s National Budget,” Eminent economist and researcher Prof. Dr Abul Barkat told The New Nation referring to a study.
“The amnesty scheme to legalize black money was also offered earlier. But it did not create any positive result on the economy, rather, a part of it was laundered abroad,” he added.
When asked, Dr Abul Barkat said that the thriving black money lowers the potential of the economy and perpetuates poverty. “It also fuels inequality,” he added.
According to data from the National Board of Revenue, Tk 18,372 crore was whitened between 1972 and 2017, with the NBR getting Tk 1,528.74 crore in taxes. Of the amount, Tk 9,682 crore was whitened during the tenure of the last caretaker government.
“The provision of whitening black money is legally flawed, morally indefensible and economically unsound. The outcome of the opportunity appears to be the protection of corruption,” Dr Iftekharuzzaman, Executive Director of Transparency International Bangladesh, told The New Nation.
He said to fight black money and corruption, we must make politicians, bureaucracy, businesses and the judiciary more accountable.
To bring about accountability, we need electoral and inner party reforms to ensure that parties are functioning democratically. Right to Information is key to bring about accountability in the executive and bureaucracy.
Since independence, successive governments have offered scope although the national economy benefits a little from such scope, instead increase corruption. Even the big hoarders have either not taken part or have only disclosed a nominal amount of their holdings.
Dr Iftekharuzzaman, a leading good governance campaigner of the country, said: We have had many anti-corruption movements but none of them has sustained. A sustained social and political movement is key to combating the black economy.
“The present government has once again offered the amnesty scheme to whiten black money though it was previously seen an unqualified success at tackling the country’s long-standing underground economy or black money problem,” said Dr AB Mirza Azizul Islam, former Finance Adviser to the Caretaker Government.
He said, people will pay only 10 per cent tax while legalising their undisclosed income, which is lower than what regular taxpayers pay. The scope will discourage honest taxpayers and encourage the corrupt to accumulate more wealth through illegal means.
“Bangladesh economy has been growing at a rate of 7 per cent annually on an average, over the last couple of years. It could have been growing at double digit rate if the menace of black money could be curbed,” said Mirza Aziz.
Opposing the amnesty scheme to black money, Dr Khandoker Ibrahim Khaled, former Bangladesh Bank Deputy Governor said, “The opportunity also given the past under various schemes but the response was poor.”
“The government’s hopes the initiative will boost private investment. But, I am in doubt about its success when such a practice failed to yield any fruitful benefit in the past,” he added.
