Wednesday, December 6, 2023

Experts against undisclosed money legalising option

Tax-paying people dislike the idea of amnesty to undisclosed money holders, but a whisper has got a momentum over it as the new budget is set to be unveiled in the first week of June with the government planning to continue with the undisclosed money legalising option.
There are requests from the business community to allow undisclosed money in the mainstream economy to utilise it and the government is also reportedly putting in its efforts in that direction to bring the huge undisclosed money into the mainstream economy ahead of the general election.
Economists as well as the Transparency International Bangladesh oppose the provision of legalising undisclosed money as they think it ‘unethical and did not bring any significant benefit to the mainstream economy.’
‘If the government allows undisclosed money in the next budget again it’ll be frustrating. It’s just showing the thumb to the constitution,’ TIB executive director Iftekharuzzaman told the news agency on Friday.
He cited four reasons for opposing the provision of legalising undisclosed money. ‘Firstly, it’s constitutionally illegal and secondly, it’s ethically unacceptable.’
Iftekharuzzaman said such provision was just like rewarding the illegal earners instead of punishing them and discouraging those who are earning legally and paying taxes honestly.
And finally, he said, such provision did not bring any significant benefit for the economy. ‘There’s no example that it helped the economy.’
The TIB chief also said the present government had an election pledge to fight graft and the government had broken the commitment to people in the last four years by allowing legalising the undisclosed money.
‘The government will have to be accountable to people at the end (for breaking their commitment),’ he added.
If it happens, it will go against the government’s anti-graft stance and commitment to establish good governance, he said.
Bangladesh Institute of Development Studies director general Mustafa K Mujeri also opposed the provision of legalising undisclosed money and laid emphasis on expanding the tax net gradually.
‘The provision of legalising undisclosed money is devoid of morality. It’s in no way supportable from the ethical point of view,’ he told the news agency.
Responding to a question, Mujeri said he did not think that the economy got benefited with such an opportunity.
On expanding the tax base, he said still a huge number of people remained out of the tax net. ‘The revenue collection won’t increase if these people can’t be brought under the tax net.’
The economist suggested bringing the people, now out of tax net, under tax net through imposing ‘token money’. ‘They you can gradually impose tax. We need to take time-bound programme.’
Economist and chairman of Unnayan Onneshan Rashed Al Mahmud Titumir also opposes the provision of legalising undisclosed money and said the government needed to concentrate on structural reforms to expand the tax net to increase revenue collection for meeting the revenue shortfall.
Many people are still out of the tax net and there should be steps to bring them under the tax net which will help boost revenue collection, he said.
The economist also laid emphasis on issues of tax evasion and tax avoidance so that people cannot practice these, depriving the government of getting taxes.
A retired NBR official preferring not to be named said the government was desperate to raise revenue income on one hand and it is institutionalising the tax-dodging scope on the other.
Amid an immense pressure by a section of businesspeople, the government had given the opportunity to legalise undisclosed money in the previous years in the capital market in the name of stimulus packages.
Finance minister AMA Muhith said the existing provision for legalising undisclosed money with fine was internationally acclaimed as undisclosed money also existed in the US economy. ‘It’s very difficult to remove undisclosed money from the country.’
Quoting some studies and surveys, he said the existence of undisclosed money in Bangladesh represented 40 to 80 per cent of economy although nobody knew what the fact was.
Mentioning that a big amount of undisclosed money is engaged in the real estate sector, he said the government was trying to bring this money into the mainstream economy. ‘I wouldn’t be able to see in my life there’s no undisclosed money in the country.’

-With New Age input

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