Prevent capital flight and tax evasion

2 April, 2019 12:00 AM printer

Tax evasion by large businesses deprives the government of much-needed revenue for achieving the annual development plan of the country. Money laundering results in flight of funds from the country which would otherwise have become part of the much needed capital driving the country’s economy. It is inconceivable that patriotic people of the country could be involved in these unethical practices which are utterly detrimental to the country’s economy.

The innumerable private enterprises are the real driving forces behind the economy of the country. Private enterprises by their very activities generate employment through job creation, earn revenue through value addition, earn foreign exchange through exports, meet local requirements through imports and generally keep the wheels of the economy of the country running.

A healthy business environment in the country can attract more foreign direct investment, encourage more entrepreneurs to invest in the country, decrease flight of capital by local and multinational enterprises and generally sustain a healthy economic environment in the country.

If businesses are not paying due taxes or laundering money by illegal means which is hampering the country’s progress then the government must do more than just punish those who are involved in the unethical practices. To motivate people to pay due taxes, the government should create an environment where people can see the positive results of development done by the government using the money earned from taxes.

Money laundering is rampant in Bangladesh as revealed by leaked financial documents like the Panama Papers. “The Panama Papers are 11.5 million leaked documents that detail financial and attorney–client information....”

For a rising economy like Bangladesh, imagine what could have been achieved by the billions of funds that are lost to the country due to money laundering! People seek to keep the money they earn in a secure environment. Socio-political stability in the country can help encourage people to have more confidence in the country’s economy and future status. 

How much obedience can a parent expect from errant children by chastising? Better results are always secured by inspiring and motivating. Although we must keep vigilance to prevent money laundering and tax evasion, but measures for a stable economy and sustainable development must also be institutionalised for long term results in preventing such unethical practices.