Whitening of black money

8 May, 2021 12:00 AM printer

It seems the government’s decision to keep the scope of whitening black money is paying off as a staggering Tk 120 billion has been whitened in the July-February period of the current fiscal year. During this time, the National Board of Revenue (NBR) earned Tk 13.2 billion in revenue from whitening of undisclosed savings. Although keeping the provision of whitening black money was difficult for the government because it drew criticism from far and wide.

But, in order to incorporate the undisclosed money into the mainstream economy, the government opened the scope for whitening black money through paying tax under three provisions—purchase of land, plot or flat, investment in capital market and payment of 10 per cent tax on the amount offered for whitening by an individual.

Now whitening of such a large amount of black money amidst the pandemic-hit economy proves that it was indeed a right move because if there was no scope for legalising the untaxed money, a large chunk of it would have been siphoned abroad. But thanks to scope of whitening black money, a large amount of it has been invested in allotted sectors and legalized by paying tax. Needless to say that it generated much needed economic activities in a time when economy slowed down due to the pandemic. And the government also managed to earn huge revenue from it when revenue collection has fallen drastically due to the economic slowdown.

Therefore, it is now clear that amnesty to black money holder to come clean worked wonder; but policymakers must be careful in order not to encourage the amassing and possession of black money which in the end upset honest tax payers. Besides, source of income of the black money holders are unknown. It might be that they amassed the money through illegal means such as social, political and financial crimes. So, if they get a chance to legalise their illegally earned money, they will be encouraged to do more crimes. So, taking all these factors into consideration, we hope the government and NBR will work to bring about economic transparency in the country.