Bowing to pressure from different quarters, the government has decided to allow black money to be invested into the stockmarket for two years, a finance ministry source said.
Finance Minister AMA Muhith might disclose the decision during his concluding speech in the budget session Tuesday evening, the source further added.
The government is going to clamp a 10 percent tax on the money for clearing its passage into the share market, The Daily Star has learnt.
The government decision follows pressure from different stakeholders over the past three weeks since the finance minister placed the budget proposals in the parliament.
Muhith’s proposal had provision for whitening money through investment only in infrastructure funds and treasury bonds, not in the stockmarket or any other sector.
Leaders of Dhaka and Chittagong stock exchanges, on different occasions, demanded of the government an announcement allowing black money for investment into the stockmarket.
Economists, however, said such scope would again inflate the market artificially. Black money holders would invest in the market and eventually leave it after whitening the money, they said.
Later, the parliamentary standing committee on finance ministry and other quarters have pushed for allowing investments of undisclosed money in the stockmarket as a temporary arrangement.
Prime Minister Sheikh Hasina on Sunday at a meeting with industrialists said she would consider the matter of undisclosed money, president of the Federation of Bangladesh Chambers of Commerce and Industries AK Azad said after the meeting.
The finance ministry has also prepared an analysis report on 'underground economy' which mentions presence of a huge amount of black money in the economy. It indirectly favoured creating scope for whitening money.
Finance ministry officials said the report was prepared last month, and on the basis of the recommendations of the report a proposal has been made to give scope for whitening money through investing in government bonds.
In a post-budget press conference the finance minister said the amount of black money is 45 percent to 81 percent of the GDP in Bangladesh. The finance ministry official said the minister quoted the amount from the analysis report.
The report said about 45 percent to 81 percent of the country's economy was underground in 2010. It said when a big portion of the economy remains outside formal economy, it creates 'asset bubble' and it may have a negative impact on macro-economy.
It also said the provision of whitening money did not bring much benefit to the economy. In the last four decades after the independence scope to whiten money was given on 11 occasions and from this the government got only Tk 1,400 crore in taxes, the report added.
It said only Tk 18,000 crore was whitened through these opportunities.
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