Dhaka, Jun 20 (bdnews24.com)—The World Bank on Wednesday differed with the government argument that it is allowing untaxed income or black money to boost domestic investment.
"Several governments had offered the money whitening option since 1975. But no profits were visible. Not too much black money had been invested," Senior Economist of the global lender Zahid Hussain told a news conference on the budget proposed for 2012-13 fiscal.
"I can tell you from my experience that not too much black money will be invested this time, too," he added.
World Bank's Chief Economist Sanjay Kathuria, among others, also spoke in the conference.
Finance Minister A M A Muhith had proposed in Parliament on Jun 7 that an option be given in the 2012-13 fiscal to legalise undisclosed income by giving 10 percent of it as penalty through investing in any sector.
Referring to a research by his ministry, Muhith had said on the following day that 42-80 percent of the total GDP of Bangladesh is black money.
"The opportunity was offered so that black money may be invested. It has to be paid by adding 10 percent fine on top of the regular tax rate. It has not been offered to facilitate money laundering," he had added.
Later in several programmes, he defended the money-whitening option.
The size of the GDP had been around Tk 7.87 trillion in 2010-11 fiscal, which means Bangladesh started the outgoing 2011-12 fiscal with over Tk 3 trillion in black money.
In a pre-budget discussion with the Economic Reporters Forum, Muhith had said he did not favour whitening black money.
"But," he had added, "A democratic government has to make many compromises."
According to the National Board of Revenue (NBR), the option to legalise undisclosed income was given 16 times after independence.
The legalised black money, however, is worth Tk 129.96 billion and the government got Tk 13.68 billion in revenue by offering the amnesty.
In the first nine months (July-Mar) of the outgoing fiscal, Tk 9.22 billion worth of undisclosed income was invested only in the stock market and the government got Tk 922 million as revenue from this amount.
In 2009-10 fiscal, undisclosed income worth Tk 11 billion was legalised by paying the government Tk 1.21 billion in taxes.
The government collected Tk 6.87 billion in taxes on Tk 37.75 billion worth of undisclosed income legalised in 2007-08 fiscal during the military-backed caretaker government.
People with undisclosed income legalised Tk 46.03 billion by paying the BNP-Jamaat-e-Islami government Tk 3.45 billion in taxes in 2005-06 fiscal.