Whitening black money to remain in next budget

Golam Mostafa Jibon: The government in its next budget for the financial year (FY) 2022-23 is going to give another scope for whitening the black money like the previous year with a view to keep the economic flow of the country smooth and flourished.But, question has intensified among the economists that the frequent scopes for black money whitening is a blessing or a curse for the country as it may encourage the people to engage in corruptions massively and earn money in illegal means.
Sources said, theopportunity to launder black money may continue in the next FY 2022-23. At present, there is an opportunity to whitening black money by investing in the stock market and buying landsor flats with a fixed rate of tax. The ongoing opportunity to launder black money in these sectors is supposed to run until June 30.
NBR officials however, said, the opportunity could be extended for another FY with a view to keep the economic flow smooth after the Covid clutch.
Experts said, giving such scope frequently is instigatingand endorsing corrupt people to earn money in illegal means. If action is not taken against such corrupt people, country’s economy can fall in dire straits.
In this context, the former chairman of the National Board of Revenue (NBR) Mohammad Abdul Majid said, “Black money whitening is not a solution, unless the source of illicit income is stopped. Rather, the loss will be more than the gain. It will welcome the corrupt people to do such illicit deeds unabated.At present, the tax officials do not want to know about the source of income, if they pay a certain amount of tax against flats and lands depending on different areas. In addition, there is an opportunity to launder black money with a 25 percent tax on cash or savings certificates and various types of deposits and a 5 percent penalty on taxes. Apart from this, black money can also be laundered in the stock market. But, all of those are highly harmful for the economy compared to the benefits.”
Prominent economist Anu Muhammad, Professor of Jahangirnagor University said, “Giving such scope frequently may cause of danger for the country’s economy as the trend of illegal income through corruption and anomalies can increase. It will encourage criminals to carry offensive activities. If invisible income goes up, country’s development will hamper drastically. So, providing such opportunity again and again will not be good for country’s future.”
According to the NBR, there has been little response to black money laundering in the current financial year.
According to the latest NBR data, 694 people whitening black money from July to November. Of them, 558 people have shown assets bought with black money. Some 123 taxpayers have whitened their cash or savings certificates and FDR money. Besides, only 13 investors have invested black money in the stock market. In the budget of the last fiscal year 2020-21, the opportunity to launder black money was given on the condition of paying 10 percent tax. The obligation to invest this money was in certain sectors including stock market, bank deposits, savings certificates, land and flats. Despite being given this opportunity to launder black money with only 10 percent tax, the taxpayers have laundered black money with tax up to a maximum of 25 percent on the displayed income.
However, in the current fiscal year 2021-22, new conditions have been added for whitening the black money.
According to the terms, if the share market, banks, savings certificates and cash in hand are laundered, they will have to pay 25 per cent tax as well as five per cent penalty on the total tax. However, in case of investment in industries, they have taken advantage of this by paying 10 percent tax. Meanwhile, in the budget for the next fiscal year, the NBR is being given a target of Tk 3,70,000 crore of total revenue. This is about 8.4 percent of GDP. In the current financial year, NBR has been given a target of Tk 3.30 trillion. As such, the next budget is about 10 percent or Tk 40,000 crore higher than the current FY 2021-22 budget from the main target.
According to the NBR, the VAT department will have to collect a maximum of Tk 1.40 trillion in the next financial year.Besides, the income tax department has to collect Tk 1.20 trillion and the customs department has to collect Tk 1.10 trillion.Apart from this, in the next budget, out of the total income, it has been estimated at Tk 18,000 crore from non-NBR.Non-tax revenue has been estimated at Tk 49,000 crore.