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Ruling Party MPs Debate Whitening Black Money Amid Budget Discussions

The Parliament of Bangladesh

The National Parliament witnessed a spirited debate on Saturday as members of the ruling party aired their conflicting views on the contentious issue of providing opportunities to whiten black money. This discussion took place during the general deliberation on the proposed budget for the fiscal year 2024-25, revealing a deep divide within the party.

Against Whitening Black Money

Dr. Gopal Dutta: Ethical and Fairness Concerns

Dr. Gopal Dutta was outspoken in his criticism, highlighting the disparity such a policy would create. “As a taxpayer, I have to pay over 30 percent tax if I have 30 lakh rupees. But someone who didn’t declare their money last year can now legitimize that undisclosed income by paying just 15 percent tax. This will make honest taxpayers reluctant to pay taxes,” he argued. Dr. Dutta’s point underscores a fundamental issue of fairness and equity within the tax system. He emphasized that rewarding those who evade taxes by allowing them to legitimize their illicit income at a lower rate sends a demoralizing message to diligent taxpayers who comply with tax regulations. Such a policy, he argued, could erode the moral obligation of citizens to pay taxes, thereby weakening the overall tax compliance culture in the country.

Dr. Dutta also pointed out that the budget overlooked informal grey-money associated with tax evasion. He stressed the importance of addressing this grey-money, which refers to income that, while not overtly illegal, is nonetheless hidden from tax authorities through various means. “Unless we address this grey-money, efforts to curb money laundering will be ineffective,” he added. By not tackling the issue of grey-money, the government risks leaving a significant portion of the economy untaxed and unregulated, which can perpetuate cycles of tax evasion and money laundering. Dr. Dutta’s critique suggests that a comprehensive approach to financial transparency and tax enforcement is necessary to ensure the integrity of the economic system and to foster a culture of accountability and fairness among taxpayers.

Former Health Minister Zahid Malek: Corruption and Money Laundering

Zahid Malek echoed similar concerns, emphasizing the moral hazard posed by legitimizing black money. “Offering opportunities to whiten black money only perpetuates corruption and money laundering,” he stated. Malek’s argument centers on the idea that such policies implicitly condone illegal activities by providing a means to launder illicit gains with minimal consequences. He contended that by allowing individuals to legitimize undisclosed income through relatively low tax rates, the government effectively undermines efforts to combat corruption and illegal financial activities. This, in turn, can lead to a culture where financial crimes are perceived as having manageable risks and consequences, thus incentivizing further corruption and tax evasion.

Malek asserted that a more effective approach would be to focus on eliminating corruption and stopping illicit financial flows. “If we can stop corruption and money laundering, there will be no need for such opportunities,” he argued. By prioritizing stringent anti-corruption measures and enhancing financial oversight, the government could address the root causes of black money generation. Malek highlighted that robust enforcement of existing laws, coupled with stronger regulatory frameworks, could deter financial crimes more effectively than offering leniency to offenders. His stance suggests that long-term solutions to financial transparency and integrity lie in preventing the creation of black money rather than offering periodic amnesties to convert it into white money.

In Favor of Whitening Black Money

Housing and Public Works Minister Ram Ubaidul Moktadir Chowdhury: Pragmatic Approach

In contrast to critics within his party, Housing and Public Works Minister Ram Ubaidul Moktadir Chowdhury defended the proposal to whiten black money, adopting a pragmatic standpoint. He acknowledged the widespread existence of black money within the economy and argued that ignoring its presence does not resolve the underlying issues. “Critics do not suggest how to utilize this black money,” he criticized, highlighting the lack of feasible alternatives put forward by opponents of the policy. Chowdhury pointed out the inconsistency of some critics by recalling an instance where BNP leader Khaleda Zia legalized a substantial amount of money by paying minimal taxes in 2007, illustrating a historical precedent.

“The reality is that black money is entrenched in our market, and we need a method to integrate it into the formal economy,” Chowdhury asserted. He suggested that by providing a legal route to declare previously undisclosed income, the government could channel these funds towards productive uses within the formal financial system. Chowdhury’s pragmatic approach emphasizes the potential economic benefits of bringing black money into the tax net, thereby expanding the government’s revenue base and potentially funding infrastructure and social development projects. This stance contrasts sharply with ethical concerns raised by opponents, illustrating a broader debate within the ruling party over the best strategies for managing and regulating economic informality.

 Neutral and Additional Concerns

Jatiya Party’s Nurun Nahar Begum: Potential for Criminal Exploitation

Adding a nuanced perspective to the debate, Jatiya Party’s Nurun Nahar Begum raised significant concerns regarding the potential for misuse inherent in policies allowing the whitening of black money. “With this opportunity, many criminals will be able to launder black money within the country besides sending money abroad,” she cautioned. Nurun Nahar highlighted the risk that such policies, if not rigorously regulated, could inadvertently facilitate and even encourage further financial crimes.

Her apprehension underscores the delicate balance policymakers must strike between economic pragmatism and regulatory oversight. While acknowledging the presence of black money in the economy, Nurun Nahar urged caution in implementing policies that might inadvertently legitimize illicit financial activities. Her stance reflects broader concerns about maintaining financial integrity and preventing abuse of the system by those seeking to exploit loopholes for personal gain.

As the debate unfolds, Nurun Nahar Begum’s perspective serves as a reminder of the importance of comprehensive safeguards and transparency measures to mitigate the potential risks associated with legitimizing previously undisclosed income. This nuanced viewpoint contributes to a more holistic understanding of the implications of such policies on both the economy and society at large.

Conclusion

The debate within the ruling party highlights a broader tension between economic pragmatism and maintaining ethical standards in tax governance. On one hand, proponents argue that integrating black money into the formal economy is a practical necessity. On the other, opponents stress that this approach undermines the integrity of the tax system and disincentivizes honest taxpayers.

As the budget discussions continue, the ruling party faces the challenge of reconciling these divergent viewpoints. The outcome of this debate will significantly influence public trust in the tax system and the broader economic landscape of the nation.

Billal Hossain
Billal Hossainhttps://www.hlnews.xyz
Billal Hossain, a seasoned professional with a Master's degree in Mathematics, has built a rich and varied career as a banker, economist, and anti-money laundering expert. His journey in the financial sector has seen him in leading roles, notably in AL-Rajhi Banking Inc. in the Kingdom of Saudi Arabia and as Foreign Relations and Correspondent Maintenance Officer of Bank-AL-Bilad. Beyond the confines of traditional finance, Billal has emerged as a prominent writer and commentator, contributing thought-provoking columns and theses to various newspapers and online portals. His expertise spans a wide range of important global issues, including the complexities of economics, political dynamics, the plight of migrant workers, remittances, reserves, and other interrelated aspects. Billal brings a unique analytical perspective to his writing, combining academic rigor with practical insights gained from his banking career. His articles not only demonstrate a deep understanding of complex issues but also provide readers with informed perspectives, bridging the gap between theory and real-world application. Billal Hossain's contributions stand as a testament to his commitment to unraveling the complexities of our interconnected world, providing valuable insights that contribute to a broader and more nuanced understanding of the global economic landscape.

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