Amnesty to legalise black money unethical

The Consumers Association of Bangladesh (CAB) chief has voiced its opposition to the apex trade body's demand to reintroduce the facility of unconditional amnesty to the investments of black money in the real estate sector.

Last week, the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) sought the reinstatement of the unquestioned legalisation of undisclosed assets for five to 10 years in the housing sector in order to curb capital flight.

But Ghulam Rahman, president of the CAB, opposed the demand, saying such scope would encourage the illegal accumulation of wealth.

"The amnesty to black money is unethical," he said.

Rahman, also a former chairman of the Anti-Corruption Commission, says he does not believe that such an amnesty would pull investments in the real estate sector and develop the capital market.

People can already legalise their untaxed money under existing laws by giving penalties.

In Bangladesh, there are people who have earned money through legal ways but have not shown them in their income tax returns. Such assets have become untaxed assets.

The existing rules allow this group of untaxed money-holders to whiten their assets. Government agencies can raise questions about the source of the income. But unconditional amnesty does not allow any government agencies to question the source of the income.

"Such a facility offers the scope to legalising illegal incomes," said Rahman.

"Unconditional amnesty is unethical and illegal. This involves deliberate evasion of taxes and dodging of financial regulations."

He said it is the responsibility of businesses and individuals to pay their fair share of taxes and comply with financial laws and regulations.

The CAB chief suggested addressing the root causes of black money and preventing its harmful effects on society.

The FBCCI demanded allowing investments of black money in the purchase of flats, plots, commercial buildings and shopping malls without any question.

If the opportunity is given, a lot of the country's money will remain inside the national border and the national wealth will grow, the trade body argued, adding that if the opportunity is not granted, capital flight will continue to grow.

In 2020-21, the government provided an opportunity to legalise black money through investment in real estate and flats without raising any questions about the sources of income on the payment of certain amounts of taxes.

A total of 11,859 taxpayers used the scope in 2020-21 by paying Tk 2,064 crore in taxes, data from the National Board of Revenue showed.

And save for land and flat valuation, about Tk 17,230 crore was whitened in the fiscal year. Some 4,514 land and flat owners whitened their assets by paying a tax of Tk 343 crore, showed NBR data.

The amnesty to legalise illegally earned wealth without question was curtailed in 2021-22. And the NBR has imposed rules that the taxpayers will have to pay 25 per cent tax on the undisclosed amount of money and pay a 5 per cent penalty on the payable taxes.