Black money legalisation opportunity destroys tax fairness: CPD
This is not morally acceptable and can create a moral hazard in society, CPD Executive Director Fahmida Khatun says.
The Centre for Policy Dialogue (CPD) has criticised the retention of provisions allowing the legalisation of undisclosed income in the proposed FY2026-27 budget, saying the measure undermines tax fairness and discriminates against regular taxpayers.
Speaking at a post-budget press conference at a hotel in the capital today (12 June), CPD Executive Director Fahmida Khatun said opportunities to legalise undisclosed income, commonly referred to as black money, remain in place through investments in sectors such as land, buildings and apartments.
"We have always said that this undermines tax fairness. Those who have been paying taxes regularly and honestly are put on the same level as those who have evaded taxes," she said.
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"This is not morally acceptable and can create a moral hazard in society," Fahmida added.
Echoing the concern, CPD Distinguished Fellow Professor Mustafizur Rahman questioned the economic rationale behind the measure.
"From an economic point of view, this is not rational. Every time the opportunity to legalise black money was given in the past, the government's revenue gain was very low," he said.
He added that the measure was also difficult to justify from political and moral perspectives because it places regular taxpayers at a disadvantage.
However, Mustafizur said certain government policies create opportunities for generating undisclosed income, particularly in the land sector.
"Particularly, there are discrepancies in determining the mouza value of land. As a result, a significant amount of money becomes undisclosed," he said.
He suggested that regularly updating mouza values could help reduce the generation of undisclosed income arising from policy weaknesses in land transactions.
