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Bank & Finance - 2 weeks ago

Hidden money vs black money

Enayet Karim: The National Board of Revenue (NBR) provides an opportunity to whiten undisclosed money or black money without question by paying a certain amount of tax in different fiscal years. But if one does not pay tax or show wealth earlier, there is a provision to show it for all time with penalty. The debate on this matter is mainly about whether to ask or not to ask. It is said that black money may be whitened without question in the next budget as well.
The ethics of laundering black money and its impact on the economy have been debated. They have a briefing note on the website of Citizens Platform on SDG Implementation on Whitening of Black Money. There is expert analysis. The former chairman of the National Board of Revenue Mohammad Abdul Majeed believes that the money that is evaded or goes to the state without declaring the income and
source of income, the money that is illegally earned, that money is black money.
According to him, serious crimes are looked down upon by defining black money as ‘undisclosed money’ while paying taxes. Article 20(2) of the Constitution states, ‘The State shall endeavor to create a condition where no person shall, as a general principle, be able to enjoy unearned income.’ It needs to be reviewed whether the close relationship between corruption and black money is being trivialized or minimized.
There is a debate about what kind of money should be marked as ‘black’ and what kind of money should be marked as ‘unobserved’. According to Dr. Mohammad Abdul Majeed, many times registration cost, stamp cost, wealth tax and capital gain tax can be evaded by showing low price in real estate purchase and sale of legally acquired money such as land, apartment, plot, shop etc. In these cases, it is appropriate to call black money ‘undisclosed money’ and it can be given an opportunity to show. But in any case, not by reducing the existing tax rate, but in addition by penalty, it should be given an opportunity to demonstrate it.
Former member of NBR (income tax policy) Alamgir Hossain thinks that not only illegally earned money, but all undisclosed money in economic terms is black money. According to the law, no other authority will question the tax at fixed rates. But those who acquired wealth illegally, have other authorities to ask. If these organizations can identify and prove illegal routes, there is no obstacle in their activities. Apart from this, those who have tax evasion cases against them do not get this opportunity to validate undisclosed income.
Former member of NBR Farid Uddin believes that the areas of creation of black money in Bangladesh are – bribery-corruption, gambling, trafficking of women and children, embezzlement of money, terrorism, prohibited goods, narcotics, arms import and trade, hundi, smuggling, false declaration in the purchase and sale of land and flats, import -false declaration in exports, non-payment of taxes, land grabbing etc. Black money is often smuggled abroad through hundis. Smuggling also occurs through international trade. Commercial money laundering is a hot topic these days. The agencies responsible for preventing this are – NBR, Bangladesh Bank, Ministry of Commerce and ACC. He feels that there is a lack of coordination between these organizations.
Many feel that simply allowing black money to become white without breaking the vicious cycle of illegal income will not benefit the economy. Of course, some call it the good of evil. Their argument is that money will be smuggled out if the country is not given a chance, which will cause more damage. They are, however, against exempting owners of illegally and criminally acquired black money. In favor of giving opportunity to those who have not shown valid income due to various reasons.
Professor Rehman Sobhan thinks that the current provision of whitening black money is sending a wrong message to the economy. This is an incentive for black money holders but a dis-incentive for those who pay taxes regularly even in tough times to be honest. Inculcating in them the idea that there is no advantage in being honest.
Dr. Debapriya Bhattacharya thinks that the opportunity to whiten black money is contrary to the constitution and equality in principle. This is contrary to sustainable development and sustainable taxation, which fosters a sense of injustice within the society. Under no circumstances can such opportunities be continuous.

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