Finance Minister AMA Muhith has brushed aside any possibility of accommodating a provision for whitening black money in the budget for 2014-15 before its passage.
Whitened money did not have that much impact on the economy as only a little amount, Tk340 crore, was whitened in FY2012-13, he told a post-budget press conference in the capital yesterday.
“In last two years, nothing much was invested availing of the opportunity. In the last fiscal year, the government received Tk34 crore as tax on the money whitened,” he said, adding the opportunity will not be continued from the fiscal year.
The minister, in his budget speech and the finance bill 2014, did not mention anything about whether the opportunity will continue or not.
“As it was not mentioned in the documents, it will not continue. I will incorporate the matter with law,” he said.
During FY2013-14, the government allowed legalising undisclosed money by investing in three sectors – real estate and housing, investment in government treasury bond and investment in any productive sector by paying 10% penal tax, in addition to normal taxes under the provisions of income tax ordinance.
Article 19E of the income tax ordinance said the untaxed money can be invested in income generating sectors such as industrial enterprises, balancing, modernisation, renovation and extension of an existing industry, building, apartment, land, securities listed with stock exchanges and any trade, commercial and industrial venture engaged in production of goods and services.
According to the Global Financial Integrity Report 2013, from 2009-2013, more than Tk2,098 crore was whitened in Bangladesh, against which the NBR received only Tk279 crore in taxes.
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.
The minister also said there are other ways to trace how people generated black money.
“Land is the largest source of investing black money as a huge amount of money every year is being invested here. We need to think on how to remove the money and that will need discussion,” he said.
Real Estate and Housing Association of Bangladesh (REHAB) General Secretary Md Wahiduzzaman yesterday said the government has so far provided the loan with many conditions so that the sector has not received much benefit out of the amnesty.
“Though the sales of apartment witnessed a hike because of the investment made by the people with the facility, it was yet to get a momentum as the limited opportunity cannot help growth of any sector,” he said.
The government can withdraw the system, but it should support the buyers with stimulus packages like refinancing of bank loans with easy conditions, which has been closed for a long period of time to help the growth of the sector, he added.
Former finance adviser to the caretaker government AB Mirza Azizul Islam said the government should now look for preventing the sources of generating black money with the enforcement of law.
“From the revenue perspective, withdrawal of the system is immaterial as the tax authorities did not earn that much money from the amnesty and will not lose that much with the withdrawal. But the government should look for tracing and preventing loopholes that helps generation of black money,” he said.