Black money includes all funds earned through illegal activity and otherwise legal income that is not recorded for tax purposes. Black money proceeds are usually received in cash from underground economic activity and, as such, are not taxed. For example, consider a property buyer who purchases land valued at Tk 200,000.
If the buyer only reports Tk 50,000 on the books and pays Tk 150,000 under the table, then there is a black money transaction worth Tk 150,000. The sellers in both examples have earned money from legal sources but evaded taxes. Furthermore, black money causes the financial health of a nation to be underestimated. It is extremely difficult to estimate the amount of black money in any economy.
These unreported earnings cannot be included in a country’s gross national product (GNP) or gross domestic product (GDP). Thus, a nation’s estimates of savings, consumption, and other macroeconomic variables would be misleading. These inaccuracies adversely affect planning and policymaking.
The government of Bangladesh is offering amnesty to money launderers by allowing them to legalize their money from overseas. The stimulus programs will continue in the 2022-2023 Fiscal Year to accelerate development by speeding up the recovery process and bringing back the economy to its pre-pandemic state.
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