FE Report

Finance Adviser Dr. Mashiur Rahman Sunday has defended the provision for whitening undisclosed money proposed in this year's budget, terming the measure as an "act of compulsion' for the sake of nation's wider economic interest.

"The actual goal is to bring the large amount of undisclosed and untaxed money into the mainstream, so that they could be invested in various productive sectors as outlined in the budget," finance adviser said at a meeting of the Foreign Investors' Chamber of Commerce and Industries in the city.

Finance Minister AMA Muhith earlier proposed the acceptance of undisclosed money without any question during the period from July 1, 2009 to June 30, 2012 provided that 10 per cent tax is paid and it is invested in certain new industries such as physical infrastructure facilities and shares of companies listed on the stock exchange.

Questioning the moral aspect of the move, the FICCI members in the meeting came down heavily on some business quarters for openly providing a supportive view of the untaxed income disclosing measure.

"While this year's budget has done enough to safeguard the growth of agriculture, energy, IT and communication; the proposal for keeping the door open to the money whitening measures is not morally supportable" FICCI President Waliur Rahman Bhuiyan said.



"Again, it is a shameful act on the part of the FBCCI, which is the apex trade body of the country to hail such a measure," he added.

Responding to the allegation, The finance adviser clarified that the government had to weigh between moral issues and the country's long-term economic interest.

"From the ethical point of view, it would be a source of moral discomfort for everyone," finance adviser admitted. "However, considering the country's wider economic benefit, the substantial amount of undisclosed money that remain untaxed must come under the revenue net" he added.

However, Mashiur cautioned that the move is not intended for investing in luxurious causes or in unproductive schemes.

"If the money that could be whitened under this measure is invested in real estate or purchasing of expensive items, the original purpose would simply fail," he said.

The finance adviser also supported the budgetary move to enhance the domestic market and accelerating the domestic demand, putting it in a wider perspective of the global economic scenario.

"With our major overseas markets currently struggling in the midst of global recession, export potential for the time being looks pale," Mashiur said.

"Against that backdrop, it is the domestic market and domestic demand that needs to be accelerated to keep the economy on steady track," he added.

Foreign investors' chamber also demanded the continuation of the government's investment policy; referring to the ongoing difficulties surrounding the Karnaphuli Export Processing Zone.

The finance adviser reassured them that the government would look after any possible financial loss that may be incurred by the foreign companies based in the KEPZ as a result of building food storage.

Referring to the increased duty on the import of newsprint, the finance adviser said the provision was needed, as the government is intending to protect the local newsprint industry.

"Moreover, the imported newsprint would remain competitive in the local market even after the increase in import duty because of their cheaper price," he said.

The finance adviser also pledged to ensure fair share of Bangladesh from the announced rescue fund of global recession worth US1.1 trillion at the recently held G-20 summit in London.