Home ›› 11 Nov 2022 ›› Front
The opportunity offered by the government to money launderers to whiten black money and the tax amnesty to bring back offshore money has failed to draw any response in the first quarter of FY2022-23.
Earlier, the government had given the same opportunity 18 times to the black money makers since the country’s independence.
But in the Tk 6,78,064 crore national budget for FY23, for the first time, it made a lucrative proposition — invest the money here and no one, not even the income tax authority, will question its source.
After the budget was passed, the National Board of Revenue (NBR) started working on reaching out to the money launderers and black money makers to bring the money into the formal channel and back to the country.
By June 30 next year, NBR expects around Tk 25,000 crore to return into the country’s economy and collect around Tk 3,500 crore as revenue from taxes, said sources.
However, NBR sources said, authorities are yet to receive a response from anyone wishing to take benefit of these opportunities despite joint efforts from the Anti-Corruption Commission, Bangladesh Financial Intelligent Unit and NBR’s Central Intelligence Cell. The office of NBR’s Tax Zone-2 is also especially operating to identify the money launderers.
Money laundering is a deep wound in the national economy. According to a report by Global Financial Integrity, Bangladesh is second in money laundering after India among South Asian countries.
According to police, some 5,000 agents of multiple mobile banking companies are involved in money laundering. Because of them, the country is losing around Tk 75,000 in remittances annually — which in terms of cost could fund the construction of two Padma Bridges.
On the other hand, according to the Swiss National Bank’s report published on June 16 this year, Bangladeshi individuals and enterprises deposited a record 871.1 million Swiss francs (CHF) or around Tk 8,265 crore in 2021 in the banks, which was a sharp 55 per cent rise from 562.9 million CHF in 2020.
Aiming to bring back the money, in line with the Finance Bill 2022, Bangladesh Bank (BB) has already instructed the scheduled banks to launch a campaign to encourage Bangladeshi nationals to send home the undisclosed money they earned abroad by paying only 7 per cent tax.
According to the BB circular issued on August 8 this year, the campaign will be carried out in line with the income tax ordinance that aims to bring back undisclosed income and the money laundered by Bangladeshis. This privilege will remain in effect till the end of this fiscal year.
In FY2021-22, some 2,300 taxpayers had taken the opportunity to whiten black money. In FY2020-21, some 11,859 taxpayers — the highest number in a year after independence — had brought in around Tk 20,650 crore through the formal channel.
NBR sources said undisclosed asset owners in Bangladesh and abroad usually avail the opportunity at the end of the calendar year and/or the fiscal year. It is likely to be the same this year as well.
Terming these privileges unethical, economists have said that the government should stop offering them every year since they are not bearing fruit as expected.
They said the government offered the opportunity to whiten the black money for the first time in 1975 under martial law. Since then, the opportunity was given 17 more times including this fiscal year. They also called the privileges offered this year worse.
Economic experts said the government will be able to bring back some of the laundered money if they take a strict position and increase intelligence activities.
Regarding the issue, former BB governor Dr Atiur Rahman said the NBR is responsible for the whole thing and it depends on how NBR takes and coordinates the initiative.
Economist AB Mirza Azizul Islam, a former finance adviser to the last caretaker government, said, “The tendency to whiten black money was the highest during the caretaker government. After that, these facilities have not brought that much money back to the country.”
“The black money whitening process requires only 10 per cent tax while many general taxpayers have to pay 25 per cent. For this reason, money laundering and the amount of black money are gradually increasing. NBR needs to pay attention to this,” he added.
