In the face of intense controversy over whitening of black money, Finance Minister AMA Muhith yesterday came up with a new formula to do justice to white money holders.
Black money holders would be allowed to make investments by paying a fixed rate of tax. If white money holders going for investments have already paid tax at a higher rate, they would get tax rebate at a certain rate.
The finance minister floated the idea at a post-budget discussion with Foreign Investors' Chamber of Commerce and Industry (FICCI) at his office.
Muhith said if his proposal gets public support, it would be adopted as a government policy, and linked up with the Public-private partnership (PPP) initiative.
The FICCI team led by its President Waliur Rahman Bhuiyan that participated in the discussion severely criticised the proposed opportunity for money whitening. The scope to use black money for buying flats has already pushed their prices beyond the reach of middle class people. And only black money holders would be able to buy flats from now on, the team members said.
The finance minister admitted that allowing money whitening is not ethically justified. But the opportunity is being given to attract more investments. He however said there are other options which can be considered.
"Truly speaking, it is very difficult to say how much investment will come out of it (money whitening). There is no specific information as to how much black money is there in the economy," Muhith said.
In this regard, he referred to economist Dr Abul Barakat's statistics, but said that is questionable.
The minister said there are several types of black money -- untaxed money, illegal money from land transfer, and misappropriated public money, extorted money and bribe money.
The opportunity for whitening money would be further discussed within the government, and opinions of experts outside it would also be considered. Only then a final decision would be taken on this issue, and made known on June 29, he said.
The FICCI also wanted to know the government position on privatisation, and asked for weekly holiday on Friday.
Muhith said the issue of keeping Friday as a working day is under the government's consideration, but he cannot say what can be done in this regard.
On privatisation, he said, "We have said in the budget speech that due to the global recession, no industry will be privatised in the next fiscal year ... In many countries, the governments are taking over private organisations to cope with the recession. We will not privatise any public sector industry next year."
The finance minister noted that what has been said about privatisation in the draft industrial policy is not the government's position. A committee will be formed next month to finalise the industrial policy, he said.