Money whitening scope to continue: Kamal

Staff Correspondent

20 May, 2021 12:00 AM printer

The scope of whitening black money will be continued in the upcoming budget for FY22 to help bring undisclosed money into the mainstream economy, Finance Minister AHM Mustafa Kamal said on Wednesday.

“Yes we will continue the scope of legalising undisclosed money this year too and it will continue until all the undisclosed money is disclosed,” Kamal said as he was replying to media queries in a news briefing after a purchase committee meeting.

“Undisclosed money is created because of our systems. If this money is not regularized or brought to the mainstream, the economic areas, where the money has leaked from, won’t get proper treatment,” he added.

Very high land registration fee and high stamp duty are a major source of a surge in undisclosed money, he said.

“Land mouza prices are shown at very low rates. There would have been no undisclosed money in the country, had the transactions taken place at market prices,” he pointed out.

“We’re gradually lowering income tax, registration fees and stamp duty so that the surge in undisclosed money can be curbed,” he told reporters.

“Earlier people would not pay income tax as the rate was higher. We’re bringing it down so it becomes similar to those in other developing and emerging countries,” he added.

In reply to a question as to a $163 or 9 per cent increase in per-capita income amid the corona crisis, Kamal said the Prime Minister’s bold step in announcing stimulus packages has helped improve macro-economic fundamentals. “All indicators are now positive.” Despite the crisis, the country saw an 8.7 per cent increase in exports, a 40 per cent increase in remittance inflow, 11.8 per cent increase in national revenue and reserves grew to $44.6 billion while inflation remained in control with a decline in non-performing loans, he mentioned.

He also cited a surplus in the balance of payment and also a positive current account balance. “We’re doing much better compared to others. Compensation packages have done well, expansionary monetary policy has been taken.  The money supply is good now, rural economy is also booming now,” he said, adding that import is also good as $1.7bn ACU payment was done in early May.

In reply to another question as to why SMEs are not getting stimulus package money, Kamal informed that the government is going slowly in this regard to ensure that SMEs are brought in a system to avoid middlemen. 

Whether the purchase of 40 oxygen generators through direct procurement method (DPM) will create scope of graft or assist the purchase of overpriced products, Kamal said the crisis is new and health is now a very important sector for the government.

Asked why the government is allowing new power plants when the country has surplus power generation, the finance minister said it will not create new capacity but replace the old capacity with replacing rickety power plants.