Finance Minister AHM Mustafa Kamal has defended his budgetary stance on granting an amnesty on the laundered money in an opportunity for the launderers to legalise their ill-gotten gains, saying it will bring a good result for the country.
“It’s nothing new. Many countries have done this and got a positive result from the move,” he said at a post-budget press briefing in the capital on Friday.
Kamal’s remarks came a day after he placed the national budget for fiscal year 2022-23 on Thursday, allowing legalisation of undisclosed money or assets that Bangladeshis have amassed abroad.
The move has drawn huge flak from the economic analysts who fear that it can encourage money laundering and might not yield good result.
In a reaction to the budget earlier in the day, independent think tank Centre for Policy Dialogue (CDP) termed the move “unethical” and said injustice has been done to the local taxpayers.
In the budget, the minister proposed a 15 percent tax on undisclosed immovable property stashed abroad while the rate is 10 percent on movable property and 7 percent on cash amount. The privilege will remain in effect from July 2022 to June 2023.
Kamal believes that those who have amassed wealth by money laundering will be encouraged by the amnesty offered in the budget to bring back the money.
The minister, however, said all the overseas assets are not black or illegally earned money. “Some money can be undisclosed because of the country’s system. Many took their assets abroad without seriously thinking about it. This initiative is aimed at bringing these assets back and infusing it into the mainstream of the economy," he said.
He claimed that similar measures are in place in the United Kingdom, the United States, Canada Germany, Malaysia and Norway, Indonesia and the Philippines. “Money has a distinctive feature. It goes where the return is higher. Those who smuggle money don’t do so in suitcases. We’re in the digital age now. It can be done in various ways," he said while explaining how the capital flight takes place.
In reply to a question on how he would keep inflation within 5.6 percent in FY23, Kamal said he was confident that he would be able to tackle the inflation as the budget has been formulated targeting the marginal people.
He claimed that inflation in the country is the lowest compared to the neighbouring countries though globally consumer goods price has increased by 30 percent.
In addition, he said actions are being taken to remove the mismatch between demand and supply of food items. “There’ll be no volatility in the market in the next fiscal year,” he assured.
Speaking on the occasion, Agriculture Minister Dr Abdur Razzaque criticised people’s tendency to buy fine rice alongside blaming some corporate houses coming to rice business for the price hike of the staple.
Supported by enabling environment created by the Awami League government, food production has increased manifolds in the country, he said.
Razzaque assured that there will be no crisis of food if the global crisis even deepens further.
Finance Secretary Abdur Rouf Talukder said the inflation in the country would have been much higher had the government not given subsidies to energy, fertiliser and food.
Talukder and State Minister for Planning Dr Shamsul Alam said some austerity measures have been taken in the budget and the demand for expanding its size has been controlled to keep it at a manageable level to increase the supply.
The finance secretary also informed that the government has followed a policy to provide ADP money to ongoing important projects and put the low-priority project in the back burner as part of the austerity measures.
In reply to a question, he said the social security is enough for the time being and its allocation would have risen by Tk 50 billion more if G2P allowance transfer system is put in place.
The budget has been formulated to promote “Made-in-Bangladesh” products, create jobs with different measures and cut in corporate taxes, Kamal said.
Despite challenges, he sees opportunities in the challenges and hopes to raise the foreign exchange reserve to nearly $50 billion.
Education Minister Dr Dipu Moni informed that they are going to bring more teachers under the monthly pay order (MPO) this year very soon.