CPD: Whitening black money is morally unacceptable

The move for a whitening of black money in the budget is morally unacceptable, the think tank Centre for Policy Dialogue (CPD) has observed.

In an instant reaction to the proposed budget, Distinguished Fellow of CPD Prof Mustafizur Rahman said: "The whitening of black money initiative is not morally acceptable. The government will not be able to benefit much from this facility.”

The proposed budget for FY 2020-21 has included several provisions that will allow people to whiten black money without any questions being asked. 

Taxpayers will also be able to make any disclosure of undisclosed cash, bank deposits, savings certificates, shares, bonds or any other securities on paying taxes at a rate of 10%.

Finance Minister AHM Mustafa Kamal made the announcement in his budget speech for the 2020-21 fiscal year in parliament on Thursday. He has tabled a national budget to the tune of Tk568,000 crore.

The think tank also said the proposed budget did not reflect the reality of the current situation.

Mustafizur said: "The country is facing several challenges in such major areas as health, economy, social and humanitarian conditions, but the proposed budget did not address these concerns."

The revenue collection target for the coming fiscal year is Tk378,000 crore. 

Of the amount, the NBR has been tasked to realize a revenue collection target of Tk330,000 crore. The non-NBR revenue collection target is Tk15,000 crore, while the non-tax revenue collection target is Tk33,000 crore.

On this issue, the CPD expert said: "The tax collection target is not realistic in the current situation". 

The CPD pointed out that the government was moving forward with a weak revenue collection structure. 

Mustafizur Rahman also mentioned that there was a need for more allocations in the social safety net to reduce inequality.

“We think that not more than Tk250,000 crore will be collected this year due to the current situation. Besides, it is assumed that we can overcome the impact of Covid-19 in a short time. However, as the risks of [contracting] the virus is increasing day by day in the country, we can’t say that the situation will be going back to normal soon. The country’s economy is at risk too,” Mustafizur said. 

“It’s not clear how money will be saved from the Annual Development Programme (ADP) to meet the deficit in the budget,” he added.