There is no mention of the matter in the Finance Bill too
A day after presenting the proposed national budget for the 2021-22 fiscal year, Finance Minister AHM Mustafa Kamal on Friday said that the government would take more time to decide on continuation of the money whitening scheme.
“Thinking a few more days, we’ll take a decision on whether to keep the black money whitening scheme in future or not,” he said addressing a virtual post-budget press briefing.
He tabled the budget without giving any clear instruction on the continuation of the existing provision for whitening black money under certain conditions. There is no mention of the matter in the Finance Bill too.
“There are observations both for and against the provision. Many people demand its continuation, while some others just oppose it. So, I can’t comment on the matter instantly,” he said on Friday.
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“We’ll make a decision whether the amnesty will continue,” the finance minister said, adding that he was yet to receive the information on how many people had whitened their black money.
On Thursday, he told parliament that during the current fiscal year till February, as many as 9,623 taxpayers had whitened black money worth Tk1,386 crore. “This additional revenue was very helpful for the economy during the Covid-19 pandemic,” the minister said.
Under the provision of allowing previously undisclosed income to invest in the capital market with some reasonable conditions like mandatory one year lock-ins, some 311 taxpayers have paid income tax of Tk43.54 crore as of February this year. “This additional liquidity has strengthened the market,” the minister added.
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According to Bangladesh Economic Association, Tk54.8 lakh crore was whitened in the last 10 years.
The government in the last budget for the outgoing fiscal year had offered the unlimited scope for legalization of untaxed money and assets for a year starting on July 1, 2020, along with indemnity to owners of such assets on condition that a specified rate of taxes is paid.
The existing fiscal year grants a special “opportunity” with 10% tax to cover undisclosed money or black money investments in the capital market, cash, fixed deposits, land-flat returns shown and whitewashed. This opportunity is available till June 30.
There has been strong criticism of the special benefits of whitening black money only at 10% tax. The civil society and research institutions have strongly opposed it. Even several business organizations and business leaders have sharply criticized the facility, describing it as discriminatory.
The highest tax rate in the country is 25%. Many honest taxpayers have to pay that. But those who accumulated a mountain of money by depriving the government of revenues, even by evading taxes, have the opportunity to legalize money through only 10% tax.
Senior Awami League leader Mahbubul Alam Hanif MP said that ethically they were against black money.
“Earning black money should be discouraged. Businessmen do not earn black money but the service holders do. As the government is giving more facilities for the service holders, I think they should stop earning black money," Hanif told Dhaka Tribune on Thursday.