FE Report
Finance Minister AMA Muhith said Friday the government would not offer any black money whitening opportunity from the upcoming fiscal year (FY).
He made the comment while replying to a query from the press at a post-budget press conference on the day as the issue was not touched upon in his budget speech Thursday and in the Finance Bill-2014.
"It is right I did not say anything in this regard. We would incorporate a provision to scrap the money whitening provision as the response to such opportunity is extremely poor," Mr Muhith said at the post-budget press conference at the Osmani Memorial Auditorium in the city.
Currently, there are three provisions for declaring black money-through purchase of flats, investment in treasury bonds and through voluntary declaration of income.
In the current FY, the National Board of Revenue received Tk 260 million in tax from about 2,550 people who purchased flats by investing their undisclosed income.
Under another provision, about 205 people voluntarily declared their income worth Tk 2.34 billion.However, the provision of 'voluntary disclosure of income' has been incorporated in the income tax law.
Under the provision, people can voluntarily declare their undisclosed money with a fine of 10 per cent tax, in addition to payment of normal tax rates as per the tax slabs.
There is no available figure on investments or receipts of tax on undisclosed income from Treasury bond.
The government bagged only Tk 340 million in tax this year under the provision, the finance minister said.
"Only a handful number of people declared black money. There is no justification for continuation of the opportunities," he said.
The government would find out other ways to indentify sources of black money, Mr Muhith said.
He said land was one of the sectors where accumulation of black money was the highest.
"We would study how to collect revenue from black money," he said.
In the FY 2011-12, nearly 90 people disclosed their hitherto earned erstwhile 'undeclared money' in the capital market paying Tk 380 million in income tax against an undisclosed amount of Tk 3.82 billion.
The highest amount of Tk 88.95 billion in undisclosed money was declared by 16,664 people in FY 2007-08. And it was done on payment of the normal rate of tax as per the existing slab plus penalty charges of 10 per cent.
Nearly 1,923 people declared undisclosed money to the tune of Tk 9.22 billion in the FY 2009-10. A total of 14,254 individuals declared their undisclosed income, amounting to Tk 7.87 billion on payment of Tk 1.08 billion in tax the in FY 2008-09.
The shadow economy should be tapped to check capital flight of the country, sources said.
As per NBR's estimation, the size of shadow economy is 36 to 45 per cent of the country's GDP (gross domestic product).
It is 45.3 per cent in Sri Lanka, 36.9 per cent in Pakistan, 23.9 per cent in India, 13.2 per cent in Singapore, 12.9 per cent in the USA and 8.5 per cent in the UK.