Amnesty for black money last fiscal year failed to translate into a substantial increase in revenues for the tax authority, thanks to money laundering opportunities and absence of any stringent punishment mechanism.
In fiscal 2012-13, some 344 people chose to whiten Tk 293 crore, which brought in a mere Tk 49.36 crore in taxes for the National Board of Revenue (NBR).
The government for the first time last year provided the opportunity to gain amnesty for undisclosed wealth by paying a 10 percent fine in addition to normal tax.
Only 273 individuals used the privilege: they legalised Tk 133 crore by paying taxes and fines amounting to Tk 33.36 crore.
Another scope to whiten undisclosed wealth came by way of investing in the stockmarket and paying a 10 percent tax on the amount.
Some 71 individuals took the opportunity, legalising around Tk 160 crore, which is way below the Tk 382 crore whitened in fiscal 2011-12.
“The black money holders tend to siphon off money abroad more than taking the government’s route,” Zahid Hussain, senior economist of World Bank.
He went on to cite the huge difference between the official exchange rate and the kerb market rate in recent times as sufficient proof of money laundering. The official rate of the taka against the dollar is Tk 77, but its rate in the kerb market is Tk 82-84.
“Huge amounts are being laundered abroad and hence the differing rates. There is anecdotal evidence that the money is being used to acquire properties in Canada, Thailand, Malaysia and Singapore.”
Lending weight to Hussain’s suggestion is the recent advertisement by a Dubai-based real estate company in local newspapers, which prompted the central bank to fire a round of warning against property purchases abroad by circumventing foreign currency restrictions.
Furthermore, a number of international studies have identified that illicit outflow of significant sums occur every year from Bangladesh. On average, $3.1 billion is siphoned out of Bangladesh, the highest among the least-developed countries, according to UNDP.
“Since the black money holders believe that the scope to legalise money will be available every year in one form or the other and there is little risk of being cabught, they persist with their illicit financial transactions,” Hussain said. In fact, the scope to legalise undisclosed wealth has been provided every year since independence except during the immediate past caretaker government’s tenure.
Between fiscal 1971-72 and fiscal 12-13, some Tk 13,808 crore was whitened, with the NBR receiving taxes of Tk 1,456 crore. Fiscal 2007-08 saw the highest amount being legalised: Tk 9,683 crore.
Source: The Daily Star
People have a shady idea that maybe 200 -500 crore taka was siphoned out of the country during BNP rule. But how much have gone out during the last four and a half year of AL rule? And will the AG be so elated and happy as he has been to bring back Koko’s (?) 6/7 crore taka? Let’s see.