People legalising money may get legal shield
The upcoming budget is likely to offer facility for legalising undisclosed money through investing in productive sectors to boost private sector investment.
The latest stance of the government, though contrary to the statement made by finance minister AMA Muhith last week against legalising tainted money in the formal economy, came during a high level meeting between Prime Minister Sheikh Hasina and top revenue board officials.
The meeting on framing the budget for 2014-15 was held at Gano Bhaban on Sunday evening. The crucial meeting, also attended by Muhith and NBR chairman Md Ghulam Hossain, continued from 8 pm to 12 pm, sources confirmed.
The budget, slated to be unveiled in parliament on June 5, is also likely to shield the taxpayers who will legalise their ill-gotten money after paying nominal tax from the harassment of anti-graft agency, a senior tax official said.
Elaborating the planned fiscal policy to be announced in the finance bill, the official said the Anti-Corruption Commission would be barred to investigate sources of money of individuals who would take the money legalising budgetary offer.
The revenue officials are of the view that black money and undisclosed money holders are shy of legalising their huge tainted money as ACC often hound them and harass them.
‘In the upcoming budget, we want to protect the owners of undisclosed money who would go for legalising their money through investing those in the industrial sector,’ a top National Board of Revenue official told New Age on Monday.
He said the NBR officials briefed Prime Minister Sheikh Hasina about the gloomy private sector investment situation prevailing in the country, described trend of money siphoning to foreign countries including Malaysia and Canada in recent period and informed her about the huge underground economy and its impact.
‘We sought money legalisation facility for productive sector for the sake of the economy and investment. The Prime Minister gave her go-ahead while Muhith did not oppose the move,’ the official said.
The meeting discussed a report of the finance ministry on underground economy, prepared three years back which strongly suggested taking measures to bring the underground economy within the fold of formal economic activities.
According to the study, the size of the country’s underground economy in 2010 was 81 per cent of its gross domestic product as the worst case scenario and 45 per cent on the basis of a moderate estimate.
The tax officials said increased burden of taxation, unregistered economic activities, unreported income from the production of legal goods and services and illegal activities, intensity of regulation and restriction in the case of foreign workers are some of the factors that have long been playing critical role in breeding black money and nurturing the shadow economy in the country.
The sources in the NBR said they had identified 10 to 12 productive sectors in the economy to be eligible for undisclosed money. The facility might link amount of money to be eligible for legalising with number of employment generation out of the investment in question.
Furthermore, a source said they were planning to offer incentive for tax-dodgers who often resort to under-value the prices of their property at the times of buying and selling. However, the source declined to elaborate.
When asked, NBR chairman Ghulam Hussain said the objective of the upcoming budget is to give a solid outline to build the economy for a period of five to seven years.
‘The prime objective of the next budget will be to make sure that economy brightens and investment gets incentive, which will result in employment creation,’ the NBR Chairman told New Age on Monday.
‘Mere boosting the revenue income for a short period is not the whole of our budgetary principle.’
-With New Age input
