The latest United Nations Conference on Trade and Development (UNCTAD) report was unveiled on November 20 and we are told that mis-invoicing and tax evasion are some of the reasons responsible for illicit outflow of money equivalent to 36 percent of total tax collected in 2015. In fact, economists believe that the amount has increased significantly over the last four years. According to the ministry of finance data, total tax revenue in Financial Year 2014-15 was Tk 1,40,676 crore. Hence, by UNCTAD estimates, at least Tk 50,000 crore was laundered abroad.
The scourge of mis-invoicing must be tackled if we are to put a reign on tax evasion that is bleeding the government coffers. While the government has done a commendable job at increasing income from tax sources, illicit outflow has also kept pace. As long as there is scope to make money by illegal means, it will be possible to bypass existing legal processes to send money abroad. As pointed out by some economists, the country has been identified as the top South Asian nation with highest instances of bribery.
More initiatives need to be taken to target mis-invoicing because that is where 80 percent of the total money laundering takes place. The National Board of Revenue has taken some steps to plug the holes in the system and we have seen the books of some big business houses involved in import and export being investigated. This is a good start, but the drive must be widened to apprehend and punish those found guilty of money laundering. Only when there is stringent punishment will it compel a change in behaviour of money launderers and discourage this tendency.