Finance Minister A.H.M. Mustafa Kamal
By Kamran Reza Chowdhury on May 27, 2022 04:16 pm
Economists are fuming over a proposed amnesty announced by the Bangladesh government that would allow people to repatriate unreported riches stashed abroad, in a bid to boost decreasing foreign exchange reserves, the first such move in the nation’s history.
The South Asian country’s foreign currency reserves fell below U.S. $42 billion in early May from $48 billion last August, according to Bangladesh Bank, the central bank.
“We are planning to announce an amnesty for bringing money back,” Finance Minister A.H.M. Mustafa Kamal told reporters in Dhaka this week. “A certain amount of tax would be charged on money brought back.”
When asked about government estimates of how much money had been sent abroad, the finance minister said: “no calculation was made in this regard.” The amnesty scheme will be included in the national budget, he said, which is expected to be presented in parliament on June 9.
In December, a Washington think-tank that monitors illicit financial flows reported that between 2009 and 2018, Bangladesh lost an average U.S. $8.27 billion annually because traders falsely declared the value of goods crossing international borders, leading to steep losses in tax revenue.
The report by Global Financial Integrity documented how some traders deliberately falsify the declared value of goods on invoices submitted to customs authorities “in order to illicitly transfer money across international borders, evade tax and/or customs duties, launder the proceeds of criminal activity, circumvent currency controls, and hide profits in offshore bank accounts.”
Under the proposed amnesty, perpetrators of such schemes would face no consequences, the finance minister said Thursday.
Such a move is akin to rewarding dishonesty, economists and anti-corruption activists said.
Mustafizur Rahman, a distinguished fellow at the Centre for Policy Dialogue, said watchdog organizations such as the Anti-Corruption Commission (ACC), and the central bank’s Financial Integrity and the Customer Services Department (FICSD) would now be rendered essentially useless.
“What will be the duty of such institutions when the government is deciding to announce amnesty for money launderers?” he said to BenarNews.
“My first question is how the government has taken such a decision? It is not acceptable on any grounds including ethical, economic and political.”
Iftekharuzzaman, the executive director of Transparency International Bangladesh, predicted that the move would double money laundering in the future.
“The moral fall in society will be deeper due to the announcement of an amnesty for money launderers. This move is contradictory to the law and constitution of the country,” he told BenarNews.