Amnesty for realtors behind money whitening binge
Finance Minister AHM Mustafa Kamal yesterday said that black money whitening has increased in the country as the government has given the scope to invest untaxed income in the housing sector.
Kamal made this comment while speaking to journalists after a meeting of the cabinet committee on purchase.
Mentioning that most people are unwilling to pay the high registration fees or stamp duties while selling houses, Kamal said the government is not getting revenue since people avoid showing the real price of a property in a bid to skip from paying the high registration fees.
To solve the issue, the government could take a number of steps, including the reduction of stamp duty.
"We have intervened wherever we need to and for doing these, black money is being legalised," he added.
A record Tk 10,220 crore in untaxed income was legalised in just six months of the current fiscal year.
This is the highest amount of undeclared assets to be legalised in such a short period and was made possible by the government's decision to not raise questions on the source of income, as announced in the budget.
In a press release issued on Monday, the National Board of Revenue (NBR) said a whopping Tk 10,220 crore had entered the formal economy after many black money-holders whitened their assets by paying taxes.
The previous highest was recorded in fiscals 2007-08 and 2008-09, during the regime of the Army-backed caretaker government. At the time, Tk 9.682.99 crore had been legalised, NBR data shows.
The finance minister also mentioned that the country received more than Tk 40,000 crore in remittance at the same time. He hoped that remittance would hit Tk 70,000-80,000 crore by this year's end.
"This money is transacted in the capital market," Kamal said.
Thanks to this huge amount of money that is arriving officially, there seems to be an air of enthusiasm for the economy.
One transaction circulates through ten hands in a week and this is how the economy has become stronger and more vibrant, according to the finance minister.
"I think we have been successful to a great extent in achieving our purpose. We want the black money to be legalised. Things have started happening and the black money will be whitened," he said.
"Money becomes black due to our policy. The same people keep paying tax but others do not pay. Our rate of taxation is high. We need to bring those to a competitive stage," Kamal added.
Bangladesh has very high interest rates due to which industrialisation in the country becomes difficult, said Kamal, adding that the government intervened in this regard.
Many people have TIN certificates but the government is not getting tax.
"So what will it do with these TIN numbers if we don't get tax? For this, we are thinking of only one area -- automation," Kamal said.
"We have to go for full automation since this problem will remain until we are successful in digitalising our system. So, we are giving highest priority on automation of our revenue system," he added.
The finance minister also hinted that the government may need to recast the budget.
"At the time when we gave the budget, our thinking was going on in a certain way. There come changes in those thoughts and that is why we need to recast the budget. We may have to bring some changes.
"Our target is to harness and exploit the resources we have to the satisfaction of the people. I think the government under the leadership of the prime minister has been able to do it successfully compared to other nations, particularly our neighbouring countries," he said.
"The prime minister is planning things in a pragmatic way so that it becomes conducive to the welfare of the people of the country and we, being part of her team, are following her directions," Kamal added.
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