Scope needed to whiten black money in budget

To protect siphoning money abroad

Mahfuz Emran: Global Economist Forum (GEF) stressed the need for special scope of whitening black money by paying minimum or maximum taxes so that the black money accumulators can legalize their undisclosed or invisible incomes for development activities in the country.
Terming the proposed budget as consuming butter (Ghee) by borrowing money, the Global Economist Forum (GEF) leaders said, it would hinder the country’s long-term development activities.
Prominent economists and leaders of the GEF came up with the remarks, while addressing a press conference held at its office in Purana Paltan of the capital yesterday.
They said, about one-third of the total money in the proposed budget has been shown depending on the domestic and foreign debt.
There will be needed a lot of allocation for the subsequent budgets to count the interest on the loans.
In the current budget, around 11.5 percent will be spent on interest. In future, it will increase to 18 percent. As a result, the economy of country may fall into a state of stagnation.
According to GEF, the lack of scope for whitening of the black money will increase money siphoning abroad.
If there was an opportunity to legalize the undisclosed income with a certain amount of taxes or fines, it would be possible to prevent the siphoning of black money abroad as well as the country’s economy would be mobilized further. They have also given emphasis on intensifying anti-corruption campaigns.
Dr. Enayet Karim, the UN nominated central President of the GEF and Dr. Mamun-ur-Rashid, Managing Director of Chattogram Stock Exchange and also Secretary of the GEF disclosed about several points of the budget and put emphasis on different important issues, while Dr. Mohammad Haider Ali Mian, President of the forum’s Bangladesh Chapter presided over the program. It was said at the press conference that the revenue collection will be increased by 10.7 percent in the next Financial Year (FY) compared to the current revised budget.
They expressed doubt over how much funding for the deficit budget will be possible here through revenue collection.
Review shows that, revenue collection can be increased by 30.5 percent. In the proposed budget, the growth of revenue collection has been estimated at 9.6 percent.
There are doubts over the possibility of revenue collection due to the recession of businesses during the corona pandemic.
It will create heavy pressure of tax collection on the National Board of Revenue (NBR), the compensation of which will have to be calculated by the general public.
Despite the declining of the country’s revenue collection, it has been proposed to increase the salaries and allowances of the government officials and employees.
Compared to that, even though the allocation in the social security sector has slightly increased, the general people will not get any such benefit.
It has also been proposed to increase the allowance of freedom fighters only at Tk 5,000, which is disappointing. The freedom fighters deserve more than the allocation compared to their contributions in the Liberation War in 71.
Expenditure on salaries and allowances of the government employees was Tk 28,820 crore in FY 2014-15, which is expected to exceed Tk 92,000 crore in FY 2023-24.
In that case, the state’s expenditure on salaries and allowances for the government employees will increase by about 221 percent in just one decade.
However, the expenditure on salaries and allowances of the state employees will increase by 19 percent in the next financial year. In addition, 7.7 percent of the operating expenses have been set aside for the payment of pensions.
In that case, 26.7 percent of the budget will be spent on salaries, allowances and pensions.
The deficit amount for the proposed budget has been set at Tk 2,24,681 crore. In that case, the estimated deficit against GDP in the next FY will be 6.2 percent, while the rate was 6.1 percent in the revised budget for the current financial year.
It has been proposed in the budget to borrow more than Tk 78,000 crore from the domestic sector. It will reduce the flow of credit to the private sector and shrink new industrialization and employment opportunities.
Referring to the matter of money siphoning, Dr. Enayet Karim said, “Every developing economy has a window where there is a special scope of whitening the undisclosed income or black money by paying minimum or maximum taxes to legalize the money with a view to invest those in different development works including share market. The initiative also helps to stop siphoning of money abroad. But, there is no such as scope in the proposed budget that may lead to rising of siphoning.”
“The lack of such scope may increase money siphoning that will fall a negative impact on country’s economy,” he added.
Leaders of the GEF termed the decision to impose a 15 percent VAT on private college universities a hasty decision.
The burden of this VAT will mainly fall on the students. Educational activities will be severely disrupted.
If the expenditure of education sector increases, many talented students of poor and poorest families will be deprived of the opportunity of education. In consequence, the popularity of the government is likely to decline sharply.
They urged the government to revise the proposed budget immediately for the sake of country’s people.