Finance Minister backtracks and legalizes black money

THE government has allowed unquestioned legalization of black money in real estate, a move that reflects the Finance Minister’s apparent U-turn and surrender to the pressure of corrupt politicians, bureaucrats and influential realtors. The decision comes three weeks after AMA Muhith publicly vowed to discontinue “all sorts of scope for legalizing black money” from the next fiscal year. That was a crowded post-budget press conference on June 6. However, Muhith backtracked on his position, and said that the facility would be available in the next fiscal year in two ways — investments in homes by paying tax, and legalization of undisclosed income by paying a 10-percent penalty on top of normal tax.
Defending the move, FM Muhith told Parliament that these two provisions can be extended as these are necessary to ensure balance in the tax payment system.
It can be mentioned that money obtained through terrorism and corruption cannot be shown to get the privilege. He said the provision for unquestioned acceptance of investments in flats by paying a certain amount of tax is part of efforts to simplify the tax payment system. But his explanation that money obtained through terrorism and corruption cannot be shown to get the privilege contradicts the allowing of “unquestioned” acceptance of investments in real estate. Such a restriction does not make by any sense when investment is without asking question. To talk senseless has become politics for those who do not know anything about politics.
The scope is given almost every year in the face of pressure from vested groups though it never brought the government any substantial revenue. Years of precedence shows that this amnesty didn’t bring any good to the economy; it only benefits black money holders. It appears to us and to the policy analysts that the Finance Minister has backtracked under pressure from a vested interest group. Moreover, the opportunity will only worsen the situation in the real estate sector. The amnesty pushes up land and apartment prices. As a result, owning a home goes beyond the purchasing capacity of common people. But, nonetheless, the offer is given almost every year to allow them to legalize money on the excuse of sluggish business in the sector.
On the contrary, the money whitening process works against the moral basis of any society, state or government and does not help ensure social justice. Ultimately, corrupt public servants and corrupt politicians take the benefit.
We are not sure that such facility will be much helpful for retaining the black money in the country. There are reports in the media about flight of capital from the country in a big way. For investment either of white or black money an atmosphere of political security is essential. But in our politics, not only money but also life is insecure. Corruption works as political incentive and this money goes out of the country more quickly than the Finance Minister will ever know.