Editorial
Whitening black money
Mmorally and economically indefensible
THE finance bill, passed in the parliament on Saturday, has provided for legalisation of undisclosed monies as in the years before. The difference in the present case is the caveat that tainted money can be invested only in productive sectors, and not in purchasing land. In view of the sky-rocketing land prices, the fetter appears to be justified. But this is watered down when you find that a person would be allowed to whiten money by purchasing a flat or a plot of land on condition that he paid a certain amount of tax.
In the outgoing fiscal, people could legalise black money by paying an additional 10 percent tax along with the normal tax but the National Board of Revenue (NBR) could question the source of the undisclosed money. In the present fiscal, the provision for questioning the source of money has been dropped if the money is invested in industries and other productive sectors.
Whilst the possessors of black money have responded to the offer extremely inadequately, honest tax-paying entrepreneurs and traders have felt hard done by. Not only were the latter hurt by the unfair practice, they also looked at it as an incentive for non-payment of taxes.
Had there been statistics to quantify how much the step has fueled increases in unearned incomes, evasion of taxes and sweeping of ill-gotten money under the carpet, it would be quite an eye-opener to an amazingly lenient culture.
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