Economy will face turmoil

Bangladesh’s economy will face many ups and downs in the coming days as local and global economies are passing through a rough patch, says Finance Minister AHM Mustafa Kamal, pinning hope on overcoming all looming challenges in implementing the budget for the next fiscal year.

Addressing a press conference at the Osmani Memorial Auditorium in Dhaka on Friday, he said the economy is functioning well now which will be stronger further, accommodating the unease of people reeling due to the war-induced imported inflation.

“We will see lots of ups and downs in the economy in the coming days,” Kamal told the media briefing on the draft budget for the upcoming 2022-23 fiscal year.

He vowed to overcome the challenges with the cooperation of all walks of life.

The finance minister was grilled by newsmen for offering a whitening facility for plundered money and assets purchased with tainted money abroad in the proposed budget.

He, however, defended his controversial fiscal announcement made in an effort to bring back looted money.

Kamal said all the money stashed abroad cannot be called laundered money, as the existing system of tax return submissions sometimes help create a huge undeclared amount of money.

“Peoples of Bangladesh have their share in the laundered money. We are trying to get back the money in the formal economy. Many countries have so far offered similar amnesty to bring their precious wealth taken out of their territories,” he told the briefing.

Indonesia brought back about $9.6 billion in 2016 by offering the money whitening facility, he added.

“We do not call them black money. Money becomes undeclared due to different reasons and loopholes in the system. We want to get the money back. We hope we will succeed,” the finance minister said further.

Money tends to go anywhere having the opportunity of better returns, he said, adding Germany, France, England and Norway undertook many efforts to contain money laundering but did not succeed.

“Even the US is also trying to bring back their tainted money invested or stashed abroad. Please do not try to put any obstruction in our efforts to bring back money from abroad,” Kamal implored. “Money was not taken abroad via briefcase, but by using different tools.”

Responding to a query, the minister said the Indian government will hand over PK Halder and his laundered assets.

Besides, efforts have been taken to bring back the money he laundered from Canada to Bangladesh.

Finance Minister AHM Mustafa Kamal on Thursday unveiled the Tk 6,78,064 crore national budget for the 2022-23 financial year, with a deficit financing of Tk 2,45,064 crore, or 5.5% of the total budget outlay.

The budget has projected a 7.5 per cent growth in the economy.

While inflation was cited as a top priority in the budget speech, no specific measure to contain the uncontrolled price pressures was mentioned in the budget, or in the Finance Bill 2022.

The proposed budget, with a payment of a certain rate of tax as a penalty, offered amnesty for money launderers to get their laundered money back.

According to the proposed provision, no authority, including the income tax authority, will raise any question regarding the source of any asset located abroad if a taxpayer pays tax on such assets.

The minister proposed a 15 per cent tax on immovable property not repatriated to Bangladesh, 10 per cent on movable property not repatriated to Bangladesh and 7 per cent on cash and cash equivalents repatriated to the country.

Responding to another question on insufficient budgetary measures on containing the rocketing inflation, Kamal said the government is trying to strike a balance between demand and supply of goods to tame the market.

He, however, admitted that market control is not possible, but actions are underway against syndication.

The minister said the prices of computers and mobile phones will increase as domestic products have to be given priority if their quality is standard. “We are discouraging products that have Bangladeshi alternatives. We will step forward with Made in Bangladesh concept by this.”

Finance Division Senior Secretary Abdur Rouf Talukder said people will consume more if production increases. The government is keen on minimising demand by cutting down the budget’s size.

“After July 1 we will control less important expenditure but the main budget will be the same,” he said.

The government will also cut some projects from the list if they are proved to be less beneficial for the people and economy, he added.

Regarding the allocation of social safety net programmes, the secretary said this year’s budget has less allocation for them as the government has not completed the G2P payment system for the beneficiaries.

“You will see, we will add more money to the allocation this year once the payment system is green-lighted,” he assured.

Asked what the authorities have been doing as they fail to stop money laundering, Bangladesh Bank’s Governor Fazle Kabir stressed that the financial intelligence wing is working to stop money laundering.

“We have seen that the money that went to Swiss Bank was not sent from Bangladesh. The allegations could not be proved,” he added.

NBR Chairman Abu Hena Md Rahmatul Muneem said, “Every year, the revenue earning targets are set a bit higher than the actual capacity and we try to reach close to the targets. We will earn close to the target this year as well.”