Allowing the whitening of smuggled money immoral, discriminatory: TIB

Adding new provisions to the income tax ordinance in the proposed budget for 2022-23 to bring back money smuggled out of the country, which the government said would keep the country's economy afloat in the face of the Covid-19 epidemic and the global economic instability caused by the Russia-Ukraine war, is unprecedentedly unethical, says Transparency International Bangladesh (TIB).

TIB has called for the cancellation of this provision, calling it unconstitutional, discriminatory, and in conflict with relevant existing laws. The provision would support contemptible crimes such as money laundering, according to a TIB press release issued on Friday.

"Whatever explanation the finance minister gives, the provision is unethical protection rewarding money launderers. According to the Prevention of Money Laundering Act 2012 and related international law, money laundering is a serious crime," said TIB Executive Director Dr Iftekharuzzaman.

"And, according to the law of Bangladesh, the punishment for the crime is confiscation of the smuggled money, a fine double the amount, and imprisonment for up to 12 years. This provision will facilitate money laundering and corruption as a whole, which is unconstitutional and an insult to the prime minister's declaration of zero-tolerance against corruption," he added.

"The proposal also blatantly discriminates against legitimate-income taxpayers and must be revoked immediately. Steps must be taken to bring back the laundered money following international and national legal procedures to ensure the accountability of money launderers," Iftekharuzzaman said.

Allowing legalised money laundering is just a continuation of the illegal and unjust opportunity to launder black money as in previous years. It is expected to increase the flow of foreign exchange and income tax revenue but experience says that despite repeated opportunities, the opportunity to launder black money in the country's economy has not yielded the expected results, nor has the government received the desired revenue, the TIB executive director added.

"So it goes without saying that the purpose of this new special provision will fail too. We call on the government to move away from this unjust, reckless, and suicidal path," he said.

He said there was an expectation that social security programmes will be expanded to reduce inflationary pressures on marginalised and low-income people, but there is no sign of that in the proposed budget. To maximise expenditure on social security, the allocation has been given to government employee pensions, interest on savings certificates, and interest waivers on loans given for Covid, none of which is a part of a social security programme for the poor.

As such, the proposed budget should be streamlined with special initiatives, seeking the advice of reputed Bangladeshi economists and other experts concerned, for practical and impartial guidance in determining effective strategies to address the challenges mentioned by the finance minister in his budget speech, said TIB Executive Director Dr Iftekharuzzaman in their press release statement.