TIB outraged by Finance Bill option for whitening black money

Transparency International Bangladesh (TIB) has expressed outrage upon the passage of Financial Bill 2021 with a provision for whitening undisclosed black money.

Although there are additional taxes and nominal fines for legalising undisclosed cash, saving certificates, plots, flats, and investments, the TIB considers the provision a gift to corrupt people and their patrons. 

This opportunity given without question is going to become a legal guarantee for people with dirty money to earn more money illegally, which in any case is unethical, corrupt, discriminatory, and unconstitutional, said TIB in a press release on Wednesday.

Questioning how the provision, which was not mentioned in the budget announcement, was added back in to the Finance Bill, TIB Executive Director Dr Iftekharuzzaman, said the government has resorted to malafide tactics to retain a provision of whitening black money. In a semblance of fairness and justice, the finance minister did not consider the matter at first. But, he finally kept it in the Finance Bill without giving any explanation when it was passed.

"In hindsight, it seems the provision was not initially included in the budget to avoid controversy and criticism, although the government was considering the issue actively from the outset. This not only calls into question the transparency of the budget process but also signals the gradual disappearance of a culture of accountability within the government. The government's move is undermining the prime minister's pledge of 'zero tolerance' against corruption," said Dr Iftekharuzzaman.

The passed bill provides opportunity to whiten undisclosed money through listed shares, bonds, mutual fund units, capital market investments, and cash and bank deposits by giving a 25% tax and a penalty of 5% on the aggregate tax itself. This rate was 10% in the current financial year.

In addition, there is an opportunity to whiten black money by buying land, buildings, and apartments with a certain amount of taxes and fines. 

In this regard, the TIB executive director said, "No matter what message the government may want to give by imposing taxes and fines, they cannot be comparable to the immorality and misconduct that has become institutionalised. While this may temporarily create an opportunity for higher taxes, the moral defeat of the government in the face of corrupt vested interests is truly alarming."

"This position of the government is discriminatory, corrupt, and a clear violation of Article 20 (2) of the constitution, which can never be desirable," he said.

In the context of keeping the opportunity to whiten black money with only a 10% tax to set up a new factory, Iftekharuzzaman said, "Even though such opportunities have already been given in economic zones and hi-tech parks, the government has never released an account of how much, if any, money has actually been invested."

"On the one hand, the government is giving legal guarantees to those who have black money, to make more dirty money. On the other hand, it is tempting honest citizens to sink into corruption," he continued.

"Considering the situation overall, it would not be an exaggeration to say that the institutionalisation of corruption in the country is on the rise, which is a real disappointment. Nevertheless, TIB hopes the government will take effective steps to ensure transparency, accountability, and fairness in the financial sector," he added.