The Financial Express in the lead item on its front page last Wednesday came up with the figures that only 85 and 90 persons had availed of the opportunity to whiten black money in the fiscal years of 2018-19 and 2017-8 respectively. A total of only Tk 1.96 billion was legalised under a waver in the three years leading to the current one. If compared with the fact that foreign banks have seen an increase in Bangladeshi-held accounts and their amounts, the above-mentioned figures tend to largely invalidate incentives given to draw investments in the economy.
While the main aim of the government for the fiscal year 2019-20, as before, has been to boost private investment by offering tainted money a stamp of legality, it has always been feared that these measures normally backfire. In fact, every year since 1976, when the first steps towards a privatised economy were taken, the question of black money has always been there to be wary of. No doubt, business's basic tenet is profit maximisation, but it is the duty of state institutions to ensure that this profit is earned through rules. As our measures fail, flight of money to undisclosed accounts, many in banks abroad, increases. The Swiss banks have been a readily available destination for some and for others in places as mentioned in the now infamous Panama Papers. Figures sometime back had shown an overwhelming rise by 20 per cent of the money kept in Swiss banks by Bangladesh nationals against a global rise of 1.0 per cent. This was against a backdrop of budgetary incentives in previous fiscal year. Inside the country, the practice of keeping money in cash form or in undisclosed bank accounts or in fixed deposits or in others' names is rampant. Some take advantage of deposit schemes or other instruments of savings; others buy gold and jewellery. The stock market is undeniably an easy abode for such money. Besides tax evasion, flight of capital through over or under invoicing, smuggling, bribery, corruption in both the public and private sectors, and an ever-growing informal sector have all been designated as the villain of the piece. Our remorseless penchant for economic development in which both the local and foreign entities all participate in money matters may also contribute to the growth of the black or tainted money.
It is imperative for any government to ensure that the extent of black money is kept at a bare minimum. It is not that Bangladesh doesn't have businessmen with a clean and forthright track record; indeed there are many. There was a strong voice against giving any further leeway to black money when the pre-budget meetings were being held this year. What matters most is that at the end of the day, policymakers extended the latitude by at least one more budget year. And although the business bodies were against it from the start, they supported fiscal measures that whiten tainted sums. This budget kept land purchase outside the ambit of whitening facility. There may be reasons behind this, but fears are always there that giving allowance to black money ultimately does the opposite. As one thinks about black money per se, one doesn't feel well. It cannot be perennially endorsed. At some point of time, there must be a stop. An engrossed taxation regime where every member, from the top to the bottom, is an expert and a dedicated collector and enforcer, is a necessity. The rules that help in investment through drawing upon black money must go some day. As figures above show, not much has been achieved through a continuous breathing space given to it. It is time that our policy-makers drew the line sooner than later. It should be a long-drawn war, not a piecemeal battle.