Whitening Black Money: Don’t give the scope next fiscal year

A number of renowned economists and industrialists have urged the government not to give the scope for whitening black money in the next fiscal year.

Only a handful of individuals are reaping the benefits of Bangladesh's astounding GDP growth due to the discriminatory provision of whitening black money. This is escalating economic disparity in the country, they said at a webinar yesterday.

Eminent economist Rehman Sobhan, chairman of the Centre for Policy Dialogue, said, "Corrupt individuals who have amassed astronomical amounts of money are getting amnesty just by paying a nominal amount of money as tax.

"This money whitening process will sharply increase economic discrimination in the country," he pointed out at the webinar titled "Black money being whitened: Beneficial or harmful for the economy?" organised by Citizen's Platform for SDGs.

Dr Debapriya Bhattacharya, distinguished fellow at the CPD, said, "Money earned by committing crimes and corruption is being termed undisclosed income and being whitened by paying tax."

This contradicts the constitution because it has been clearly stated in the charter that the state will create such conditions that none will be able to possess and benefit from unaccounted income, he noted.

"The creation of the opportunity to whiten black money has lightened the gravity of offences that are being committed to evade tax or to have ill-gotten gains," he observed.

Abdul Mazid, former chief of the National Board of Revenue, said, "The Finance Bill 2020 should be reformed because it has created a situation where honest and regular taxpayers are paying 15 to 25 percent tax every year, while tax cheats and other offenders are whitening their money by paying only 10 percent tax."

Rizwan Rahman, president of Dhaka Chamber of Commerce and Industry, said, "Tax cheats and leaders of criminal gangs are becoming major players in the capital market as they are investing there a huge amount of black money whitened by paying 10 percent tax. They are also investing in real estate, hospitality industry and so on.

"In this way, the business environment is being affected, and honest industrialists and investors, who pay taxes, are being discouraged," he mentioned.

NBR data shows 7,445 individuals whitened Tk 10,220 crore by paying Tk 950 crore as tax in the first six months of the current fiscal year.

According to the Finance Bill 2020, a person can whiten all his or her undisclosed income by paying 10 percent tax.