The Centre for Policy Dialogue (CPD) has condemned the government's decision to allow undeclared money to be legalised at a reduced tax rate, calling it unjustifiable and counterproductive.
This controversial move, according to CPD researchers, undermines honest taxpayers and promotes corruption.
“What kind of social justice is this? It is a great injustice to those who are regularly paying taxes. Morally and economically, this cannot be acceptable,” Fahmida Khatun, CPD’s executive director, said at a press conference today (7 January).
Finance Minister AH Mahmood Ali presented the proposed national budget for the fiscal year 2024-25 in parliament yesterday (6 June), including a provision for legalising undisclosed money by paying only 15% tax.
In contrast, the prevailing laws require honest taxpayers to pay up to 30%.
“The policy not only fails to enhance tax collection but also erodes trust in the tax system, ultimately encouraging tax evasion and undermining the country's economic integrity,” said Fahmida Khatun.
CPD Distinguished Fellow Professor Mustafizur Rahman expressed his dismay, noting that the policy contradicts the ruling party’s stated commitment to zero tolerance towards corruption and financial misconduct.
“Will you bring this ill-gotten money into the mainstream economy by coddling those who evade taxes, default on loans, and launder money, or will you fight against these corrupt practices?” he questioned.
Meanwhile, Khondaker Golam Moazzem, CPD’s research director, echoed these concerns, identifying the tax amnesty as a misguided incentive.
“The government currently does not have any instruments to automatically identify undeclared money. Unless an integrated financial system is established, providing such incentives or opportunities to legalise money at a lower rate does not yield much benefit,” he explained.
CPD’s analysis suggests that such policies have historically failed to significantly boost tax revenue, contributing instead to a persistently low tax-to-GDP ratio, he said.
