Black money totalling around Tk 700 crore was whitened from July to April 10 of this fiscal year.

National Board of Revenue (NBR) sources said there are indications the amount might go up to Tk 5,000 crore by the end of the fiscal year. This time black money is being whitened much more than in the previous years.

Many of the newly formed companies' directors and new members of Dhaka Stock Exchange (DSE) have also used the opportunity to whiten their black money.

Meanwhile, top business leaders said the opportunity given to whiten black money is unethical and it contradicts the anti-money laundering act. And it is not at all acceptable that many are whitening their future black money, they observed.

Last year, the finance minister extended the opportunity of whitening black money by another year, saying it would be the last year this opportunity is being given. Before announcing the national budget last June, he had repeatedly said he would not extend the opportunity any more but at the last moment changed his mind, much to the criticism of different quarters.

NBR sources said they believe this opportunity won't be extended further.

According to the existing rules, one has to pay only 7.5 per cent tax for whitening black money, while white money holders have to pay 10 to 25 per cent taxes. This shows black money holders are enjoying more advantages than honest taxpayers.

Black money is now being whitened in various ways. Many are doing this claiming that they have the money in banks while many others are forming companies and then whitening the black money in the name of directors of the companies.

Moreover, some people claiming that they have the black money in hand are paying tax for whitening it. This way they are whitening a large sum of black money that they will have in future. For instance, if one claims he has Tk 10 crore and whitens it, the NBR does not check if the person really has the claimed amount. In future, the person will use the money.

NBR sources however said it will be of no use even if they check whether the money is really there as the person concerned can easily arrange it from elsewhere just to show it at the time of checking. They admitted that loopholes in tax laws are allowing such corrupt practices.

When contacted, President of Metropolitan Chamber of Commerce and Industry (MCCI) Latifur Rahman said, "I have also heard some people are declaring large amounts as black money, estimating their future illegal earning. The NBR is allowing them to do so without asking about their sources of income. The NBR should ask black money holders to keep the amount in a bank account to avoid the malpractice."

Most of those whitening their black money are businessmen while people of different professions including doctors, lawyers, chartered accountants, bankers and government officials are also there. The list includes even housewives.

Sources said 35 people were given membership of the DSE, most of them relatives or friends of ministers or ruling alliance leaders. Each membership was sold for Tk 80 lakh, and it was made compulsory that a member must form a company and get it registered with Joint Stock Companies. Besides, the companies must have a paid up capital of at least Tk 1 crore each.

Asked if the NBR will get tax against the whitened money, NBR sources said no one is going to keep the money idle. Even if he keeps the money in banks, the NBR will get tax from the interest. Those who will invest the whitened money in business, the profit is certainly going to be taxable.

Black money holders are getting more and more opportunities to whiten their undeclared income but the policy of successive governments since late 1970s has failed to get significant amount of black money whitened.

The first such opportunity was given in 1976 that enabled black money holders to legalise their illegal money paying 25 percent income tax. Since then, a total of Tk 3,920 crore has been whitened, NBR sources mentioned.

But the amount is very small compared to the colossal amount of black money, and the size of GDP (gross domestic product) that has increased 30 times over the last 29 years.

Latifur Rahman said the entire system of whitening black money was introduced disregarding all moral obligations.

The MCCI always protested the system and it is still against continuation of the process.

The system is punishing legal taxpayers who pay 25 per cent for their hard-earned money while criminals are legalising their black money by paying only 7.5 percent. "It is sheer injustice," he said.

"Is the NBR allowing criminals' money to be whitened through this process? Does the black money whitening process legalise money laundering?" Latifur Rahman questioned.

"The government introduced money laundering prevention act to check illegal transactions but it allows whitening money earned probably through drug and arms smuggling," he said.

In reply to a question, Latifur Rahman said, "I have never seen any large company established through investment of black money."

The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) President Mir Nasir Hossain said use of the black money whitening policy is stepped up toward the end of a fiscal year.

The FBCCI in principle does not support this system. It was introduced to allow a huge amount of black money come in to the mainstream economy.

The system may discourage normal taxpayers, he said. "Nothing unethical should continue."