Amnesty for black money will be unethical
We wholeheartedly agree with the chief of the Consumers Association of Bangladesh (CAB) who opposed the proposal to reintroduce unconditional amnesty to whiten black money by investing it in real estate. Recently, the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) made the proposal for a return of this opportunity for five to ten years in order to prevent money from being laundered abroad. Such a suggestion would be considered preposterous under different circumstances. Unfortunately, this is not the first time that we are hearing about this "indulgence".
In FY 2021, the government gave this opportunity for black money to be legalised through investments in real estate, no questions asked about the source of funds, upon payment of a certain amount of tax. The amnesty allowed black money subject to a 10 percent tax, while a compliant taxpayer had to pay 30 percent in tax which was later reduced to 25 percent. But as the CAB's president, also a former chief of the Anti-Corruption Commission (ACC), has said: this practice is not acceptable because it would only encourage the illegal accumulation of wealth. Many individuals in the country earn money legally but do not show that in income tax returns, resulting in assets becoming untaxed. Thus, the government's efforts to improve its tax revenue will be nullified with an unconditional amnesty as it will only encourage tax evasion.
We agree that this move would be unethical and unconstitutional. It will give the wrong message to those who earn illegal income – that it is okay to do so as long as they invest it in real estate later. On the other hand, it is discriminatory towards those who faithfully pay taxes and contribute to the country's development. Moreover, in the long run, it will be detrimental to our society, with more and more real estate being gobbled up by a certain group of people who do not care how much the prices go up, leading to further inequality of wealth and assets.
The justification given by the FBCCI is that investments in flats, plots, commercial buildings and shopping malls will keep money inside the country and thus curb capital flight. Even if that were true, a country cannot bend the rules of ethics to prevent money from being laundered abroad. Also, can it really be guaranteed that individuals who have, over the years, laundered thousands of crores of illegally-earned takas and bought expensive real estate abroad, will suddenly start investing at home because of this amnesty?
It should be noted that the National Board of Revenue has since imposed rules that taxpayers will have to pay 25 percent on undisclosed funds and pay a 5 percent penalty on payable taxes. We echo the CAB chief's opinion that all businesses and individuals are responsible for paying their fair share of taxes and abiding by laws and regulations. Therefore, the government should focus on reducing corruption which is the root cause of the massive accumulation of black money. The proposed amnesty, if reinstated, will only increase corruption instead of curbing it.