The opportunity to legalise undisclosed money is a fiscal measure to dishonour the honest taxpayers in an oblique manner and reward the people who do not declare their real earnings, economists said.
They said the undisclosed money, popularly termed as black money, in the real estate sector and other income generating sectors like capital market, industrial enterprises and expansion of an industry could not yield any positive impact on the economy as witnessed in the past.
The provision for whitening black money is likely to be continued also in the upcoming fiscal year as indicated at different pre-budget meetings of the government.
From 1976, the government allowed undisclosed money to invest in a good number of sectors, including real estate, without compelling them to declare the source of income, and making a provision to pay only a penalty of 10% in addition to the regular tax of the money invested.
NBR Chairman Md. Ghulam Hussain, at different pre-budget meetings favoured allowing undisclosed money on excuse that many of the countries has gone far away in terms of financial and social development, by just allowing undisclosed money in investments with trouble-free conditions.
The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) President Kazi Akram Uddin Ahmed at the 35th consultative committee meeting of NBR requested the National Board of Revenue to continue with the facility to stimulate investment in the productive sectors, including human resource development, agriculture and technology.
At a recent pre-budget meeting, Centre for Policy Dialogue distinguished fellow Dr Debapriya Bhattacharya said allowing such facilities create culture of tax evasion.
“The allowance can never bring good for the country, as people, who took such advantage did not invest the money in productive sectors,” he said.
The NBR officials said the facility has brought no positive impact on the economy as people, who gained such money mostly spends the undisclosed money in buying assets abroad, or using in luxurious life, or siphoned off the money abroad and deposited with foreign banks.
During the period of July to April this fiscal year, Tk234 crore has been whitened in different income generating sectors, according to data compiled by the NBR.
Real Estate and Housing Association of Bangladesh (Rehab) General Secretary Md. Wahiduzzaman has admitted the sector has not received that much of benefit out of the amnesty.
“The government can support the sector through refinancing of bank loans with easy conditions and by giving other benefits to realtors and flat/plot buyers as an alternative way, if the facility to legalising undisclosed money is cancelled,” he said.
Former finance adviser to the caretaker government AB Mirja Azizul Islam said the facility should not continue as it has failed to prove itself as a productive decision.
“The facility, if continued, will be a discriminatory move against the ordinary taxpayers as it will encourage people for making illicit income and have rewards in exchange of it,” he said.
Terming the criteria “illegitimate,” he said if continued, people will go for generating illegitimate income and later disclosing it through the facility for making the money legal.