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The Financial Express

Holders of ill-gotten wealth should be held to account


Holders of ill-gotten wealth should be held to account

The current provision of legalising undisclosed fund, or black money, may come to an end from the next fiscal year. Finance ministry officials are learnt to have been instructed not to include the provision of whitening undisclosed money by paying a nominal penal tax at a flat rate of 10 per cent in the FY 2021-22's finance bill. However, this is still a possibility. In truth, it all depends on the last-minute decision of the political high-ups. The provision of giving the government's seal of approval to unearned money has been around since the nation's independence. The National Board of Revenue (NBR) sources say, between 1971 and 2017, a total of TK 18,372.13 crore was whitened by a few individuals. Considering that the legalisation of the amount took over a period of more than four decades, it cannot be said that the portion of the grey economy of the country thus disclosed through such government provision so far is significant or that the money so legalised has been invested productively in the economy to produce goods, services, or create jobs thereby making positive contribution to the county's Gross Domestic Product (GDP).On the contrary, the money so whitened or legalised has mostly gone to non-productive sectors like purchase of landed property, apartment buildings as well as in conspicuous consumption such as spending lavishly including purchasing luxury goods, ornaments, jewellery, expensive clothes, cars, travelling in foreign countries, throwing big parties and suchlike activities. The largest number of black money holders, on the other hand, did never show any willingness to take advantage of the successive government's generous offer to whiten their money. A simple explanation for such apathy among majority of the black money holders to respond to the government's wooing may be that many among them are otherwise people of power and prestige in society. Some of them may even be in the government. Would they lay their social position and prestige on the line by responding to the government offer and declaring the fact that they possess ill-gotten wealth? Worse, they and others who are not so important know better than to disclose their hidden wealth by accepting the government offer. For acceptance of government offer may only diminish their ability to continue with their illicit trade or other illegal means to earn money.

But what kind of illicit activities these people are engaged in? Those include a whole host of anti-social activities such as drug trafficking, trafficking in persons, smuggling, gambling, graft and various other forms of corruption. There are also others who earn legally but evade paying taxes against their income. As such, their wealth is also part of the grey or black economy.

At this point, one may like to have an idea of the size of this black  or shadow economy in Bangladesh. A study by the International Monetary Fund (IMF) done in 2018 estimated that black or underground economy covers over 30 per cent of the country's Gross Domestic Product (GDP). However, the IMF study took into account only untaxed and hence undisclosed legal earnings. Criminal means of earning, however, remained outside the purview of the IMF study. A government-initiated study carried out in 2013, on the other hand, found that over a period of 37 years between 1973 and 2010, the black economy was, as it were, in its heyday, since measured against the nominal GDP (nominal GDP uses current prices to measure itself without adjusting for inflation, while the real GDP adjusts for inflation), the share of the underground economy demonstrated a sharp rise from 7 per cent (in 1973) to 62.75 per cent in 2010.What helped the black economy to grow to such height during the period under review is a subject for those who study social and economic trends. But for the common people it is a matter of grave concern. Obviously, the nation's resources, the fruits of the toiling masses' hard labour, are being stolen by some anti-social elements. Since far from taking any action against these people, the government has rather shown uncalled-for generosity towards them, their power and pelf have only increased by this time. And despite the government's continued softness towards them, they have not come in a big way to invest their unearned wealth in the formal economy so far. And the reason why they are doing so we have already tried to explain in the foregoing paragraph. In fact, their very way of life is antithetical to the ethos of the majority of the population.

In the circumstances, will governments continue to appease the black money holders and not take the legal action they deserve? Due to the successive governments' leniency, these anti-social elements have only been gaining strength and the size of their hidden economy challenging the formal one. It is time the government put its foot down and decided to take action against the possessors of ill-gotten wealth. Simultaneously, a crusade against corruption within the government and society has also to be launched to root out the collaborators, even mentors, of the anti-social operators from within the administration and society

The nation is expecting a determined stand of the government during the next budget.

Once the government begins to call a spade a spade, the common law-abiding people will feel encouraged.  For, so far, they were being haunted by a feeling of abandonment.

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