Meer Ahsan Habib H

Nod to black mone but for who t k ey f om

July 10, 2012

Black is defined as non d n-existence of colour while white is the opposite, com f e mbination of all colours. S So, psycholog gically, white is supposed to be more de t esirable than b black.But this is not happe s ening at all. B Black appears al the more de ll esirable bla diamond, black marke black magi and the list goes longer. Soon ack , et, ic t after his appointment as the Railway Minister, Mr Suranjit Se n Gupta, MP paid high att a a y M tention to find out d black cat of railway that he claim to be resp ts y med ponsible for m mal-governanc and huge l ce loss in this pu ublic sector. Jus a couple of months later the whole country witnes st f r, ssed some bla cats caugh incidentall ack ht ly with hand amount of money by th Boarder Guard Banglad dful he G desh. The afte ermath is alre eady known to the o readers. Mr APS said that he was th sole owner of the money and the othe two did not make any cl M t he y er t laim. The sourc of the huge amount of money is a big question but it can be ass ce e m g t sumed that he did not decla e are this mone in the last tax year. Ther ey t refore, the col lour of this un ntaxed money is BLACK. This is rather y r Blood Money as it was made out of the blood of ordinary pe M w o eople who pa this money as bribe to g a aid y get job. The gove ernment in th current fisc year has gi he cal iven the oppo ortunity to wh hiten Black M Money with an option of paying the r f regular tax plu a 10% fine us e. Argumen are there t nts that such opportunity will lure investme But it wil be very unf ent. ll fortunate if it let hoodlum go unchalle ms enged with th blood money. heir As the bu udget is place in June, black money ed becomes a hot topic a s across Bangla adesh during t the month of May-June. T year was no exception A f This s n. number o discussion and seminar took place that of ns rs strategise ways to br ed ring black mo oney in the mainstre eam economy Most of these discussion y. ns opined fo allowing w for whitening of b black money b by paying re egular tax plu a fine and t governme us the ent gave a fi inal nod to thi demand. is The most lucrative job in Banglades is probably the job of a sales assistan at Titas Gas Our manag sh y nt s. geable system all lows a simple sales assista to earn tho e ant ousands of cro of taka m ores money and fav vours him to become an industrialist Readers mi n t. ight remembe that during the last careta er aker era, the j joint taskforc ce commissioned to unear corruption in the state owned Titas G discovere that 68 Tit staff owne rth n o Gas ed tas ed property worth Tk 10,0 crores. On sales assis w 000 ne stant topped th list by own he ning property worth Tk 2,1 y 100 crore. The much talked about sales assistant now owns industr group con e d a w rial nsisting of 11 sister concer 1 rns. The next most lucrative job is proba m ably the job of an APS to a minister. Th former APS believed to be he S, o mastermin of the railw nd way-gate scan ndal, is aged 34 or 35, but owns a flat, a car and 18 a 3 acres of ances stral land. Besi ides, he runs a deposit pen nsion scheme of one hundre thousand t ed taka a month. Fortune smil at led him in eve way and he is probably now sneerin to those wh reported a ery h y ng ho against him an demanded a fair nd probe of railway-gate. r Now we have to wait to see whether the governm will allow whitening of such black money made out h r ment w k e of bribery or unlawful activities. To justify gove y o ernments dec cision, the finance minister argued that t r the

government did do so to stop money laundering, combat corruption and increase investment. We undoubtedly need more and more investment but it is our high expectation to the government that it will not encourage the above stated kind of people. Though there is no accurate figure, the amount of black money in Bangladesh economy, roughly estimated, ranges between 42-82% of GDP. It is a clear indication that Bangladesh is crippled with corruption bribery, dacoit activity, fraudulent transactions in public and private entities and falsification of assets etc. Apart from these sources, a large amount of earned money remains untaxed, popularly known as undisclosed. The government, in this regard must draw a clear distinction between black and undisclosed, and that it must not under any circumstances will allow whitening of black money. There should be clear provisions that institutions like AntiCorruption Commission (ACC) can challenge such income, and if necessary, can bring them under trial. A blind eye to black money will only discourage the taxpayers. Regular tax plus a 10% fine for undisclosed but honest income may be alright but it is expected that it will not be continued once FY2012-13 is over. There are a large number of people who does not pay income tax even after being eligible. There is a strong need for regular campaign to encourage people to pay tax in due time. The government can further strengthen the National Board of Revenue by increasing its human resource; can take measures to enhance the capacity and can further ease the tax paying procedures. It is encouraging to see that the NBR has already taken some positive steps including online self-assessment of tax, epayment, yearly tax fair etc. As stated above our policymakers are expecting a dramatic change in the investment scenario. Let us take a look at the history. On June 1, a report in a local English daily quoted NBR statistics saying Tk 12,996 crore has been whitened since 1975. The state has earned a nominal Tk 1,368 crore as taxes. Besides, none took the opportunity to whiten black money through investment in the share market. A big hype was raised by capital market godfathers to allow black money in this sector which only contributed to further manipulation of the capital market. What is the use of allowing such provision once again when such little amount has been whitened over the last 37 years since 1975? The government is yet to take any firm action against the capital market manipulators who are believed to have earned thousands of crores of taka through market manipulation. It is widely believed that the investigation committee led by veteran economist Ibrahim Khaled identified market manipulators and recommended some specific measures. The country is yet to see the manipulators under trial and implementation of the recommendations. It is widely anticipated that nominal amount of black money will be whitened this time due to the harder whitening provision. Therefore, it would not be unjust to reach to the conclusion that those who are whitening black money are very few in numbers but certainly have strong influence over the policymaking process. Something is very wrong with the existing democratic system irrespective of political parties in power; it has favoured whitening of black money. Bangladesh Nationalist Party-led government allowed whitening of black money in 1991-1996 and 2001-2006. According to the then Chairman of the National Board of Revenue (NBR) Mr Khairuzzaman Chowdhury, a total of Tk 2,500 crore was whitened, by the end of third week of June 2006. This time the black money holders had to pay a trivial 7.5% tax. Surprisingly when the finance minister placed the budget of FY 2012-13, the opposition leader came down heavily on the government for allowing black money in the upcoming budget. She alleged that this was done to help the newly formed banks. She added that if elected next time, her government will not give any such opportunity. Now a question can genuinely be raised that why did her government allow whitening of black money then. Even then, we believe from the bottom of our heart that things will change. The present government in its first year allowed whitening of black money. Although it was discontinued later, a second chance was offered in third year against investment in stock market. The effort in fact went in vain. The election manifesto of Bangladesh Awami League which claims itself as a

Charter of Change says, The rape of the democratic constitution, rehabilitation of war criminals and religious fanatics, criminalisation of politics and promotion of militancy, institutionalisation of corruption, and the sway of black money and muscle power overtook the post-Bangabandhu government. So another nod to black money will only strengthen the sway of black money. Although the last caretaker government earned sharp criticism for its many anti-democratic activities, it was them who for the first time in history of Bangladesh established truth commission and launched massive drive against black and laundered money. But with the change in power everything went in vain. The truth commission was abolished and well-known figures who often talk about good governance and transparency stood by their side in the courtroom. Ordinary people like us do not have any authority to challenge the policy of a democratically elected government. We can, however, only disagree with such policy that rejects the fundamentals of democratic system transparency and good governance. We are hopeful the present government will call it a day for black money and the party or coalition which will run the country in future will do the same. http://opinion.bdnews24.com/2012/07/10/nodtoblackmoneybutforwhom/ Meer Ahsan Habib is a development activist.