Danger of treating black money softly

'Black money', according to Investopedia,'includes all funds earned through illegal activity and otherwise legal income that is not recorded for tax purposes'. The sources of black money, as defined, include tax evasion as well as corruption, money laundering and illicit trade. So, ideally, in a law-governed society, earning and holding of black money is a punishable offence. But in the real world it is often allowed to exist and, in many cases, even thrive. Bangladesh is no exception. Earning of black money is so widespread in this part of the world that the practice is not even questioned nowadays. So, one is not surprised, though some economists and social activists who are still critical of the so-called unethical practices like corruption, owning ill-gotten money, etc., when the finance minister in his budget for the fiscal year 2024-25 kept the provision of whitening black money without scrutiny through payment of 15 per cent tax. In other words, illegally earned money has again been given the seal of approval.
However, the money-whitening opportunity, according to the proposed budget for FY25, will be available for only one year till June 2025. But the provision of legalising black money has continued year after year in the same manner and there is no guarantee the practice would stop by the next financial year. In fact, this culture of wooing black money in the hope of mainstreaming it is indicative of the power of black money and its owners in society. Interestingly though, despite all the coaxing and cajoling, the holders of black money never responded to the government's offer at the expected level. Successive governments since independence have been offering such amnesty to black money owners. Going by the country's top tax regulator, the National Board of Revenue (NBR), since independence till 2022, Tk455.22 billion could be whitened by such means so far. The revenue that went to the government's coffer is a paltry sum of Tk46.41 billion. The amount was earned over a period of 50 years (between 1972 and 2022)! So, it is not hard to see why and how a section of society is getting richer by the day. Unsurprisingly, the tax authority, or the government for that matter, is getting lukewarm response from the black money holders making it clear that they are not willing to come under the NBR's tax net. This approach of the government's handling them with kid gloves only betrays its weakness, which the corrupt quarters take full advantage of. So, what is the point of showing such generosity to those people who are having a field day by defying law, whereas the honest income earners are paying taxes just out of their honesty and willingness to abide by the law? And this softness towards those earning money illegally and hiding it from the tax authority is only apt to send a wrong signal to society. It is that if you are somehow able to earn a large sum of money illegally, keep it to yourself evading tax, you will be rewarded. But if you are a law-abiding, honest citizen and not hiding your earnings from the tax authority, you are nobody. Worse, if you fail to pay your tax, you will be subject to legal proceedings.
Given the nature and composition of the governments in the developing and least developed world, fighting corruption, illicit trading, money laundering that create black money is in most cases a tall order. How is the government, for instance, going to bring those involved in illegal earning to book? Are the enforcers of law above board? Moreover, do they have the power to question someone in high office about her/his source of earning in case there is a report on the latter's acquisition of money illegally,? The fact of the matter is that the law is selectively allowed to take its own course, despite all the claims to the contrary. Whenever one sees the instances of law being applied, or appearing it to be so, oftentimes, there is a political decision working behind it. Law, which in an overwhelming number of cases is an ass, does not operate the way it is formulated to do.
However, this is not a great revelation that law cannot operate independent of political will in the developing or the least developed world. Recent developments in the advanced West, which so far appeared to be the role model before the rest of the so-called less developed societies with flawed or no democracy, make one suspicious if ethics and law are just maxims to be found only in books and not in real life anywhere, not even in the so-called developed societies. However, that should not be the reason for us to be complacent either.
Despite all the limitations, corruption that breeds black money has to be addressed, if only not to demotivate the segment of citizens who are still willing to abide by the rules and regulations of the state. Especially, the syndicates, cartels and middlemen engaged in embezzling public funds, giving illegitimate patronage to some through abuse of power, illicit trading through over and under-invoicing and so on need to be at least brought under control, if not eliminated altogether. Otherwise, if the black money holders, whether by paying the penal tax or not, continue to flaunt their wealth before the rest of the people who cannot make ends meet with their honest incomes, the income disparity goes on widening unabated. That is a recipe for disaster. It must be avoided at all costs.

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