[🇧🇩] Corruption Watch

[Saif]

Amnesty for black money holders is a disgrace

It will not reduce capital flight, only encourage malfeasance

www.thedailystar.net

Amnesty for black money holders is a disgrace
It will not reduce capital flight, only encourage malfeasance

VISUAL: STAR

We condemn the parliament's decision to once again approve a provision allowing black money holders to legalise undisclosed wealth without any scrutiny by paying a 15 percent tax, despite protests over the past few weeks. The provision is set to come into effect from July 1. While the country's highest income tax rate stands at 25 percent, allowing black money holders—many of them accumulating their wealth through corrupt means—to legalise it at a much reduced rate is truly befuddling. Experts, anti-graft watchdogs and even some lawmakers had strongly opposed the move which would send a wrong message to both individuals amassing black money and honest taxpayers.

The message is simple: the law is set in such a way that it favours black money holders over honest taxpayers. The former will no doubt be encouraged by it. And when those who earn their money legally are made to pay higher taxes compared to those who do so illegally, why should they, too, not try to game the system? Because the Awami League government has regularised this budget provision over the years, citing scenarios that defy logic, honest taxpayers (belonging to the higher tax slabs) may be forgiven for thinking they would be better off by not filing regular taxes, and making use of this provision later to pay a reduced tax. When laws are designed to create such discrepancies and encourage immoralities, it is not difficult to understand the moral standards of those arguing for these laws.

Given how widespread corruption has become in the country, the provision would come as a huge relief for the corrupt. They would be assured to know that despite massive public outcries, many in key positions are still willing to bend the rules in their favour. Not only that, they are even willing to undermine Article 20(2) of the constitution to do so. Except in 2020-21 (during Covid-19), the amount of black money whitened through this process has been a drop in the ocean compared to the estimated size of our black economy. The data clearly debunks the government's narrative that providing such a facility is going to bring significant amounts of black money into the mainstream. But even if it did, why would lawmakers accept money made from drug dealing, human trafficking, or other criminal activities being legalised under a special provision in the first place?

Having provided this facility repeatedly, has the government succeeded in reducing the size of the shadow economy? Has it improved its tax system or revenue collection as advertised? Has it managed to reduce corruption and strengthen rule of law? The answer to all these questions is a resounding "No". The government should, therefore, immediately withdraw the provision, and make sure black money holders—particularly those involved with criminal and corrupt activities—are held to account.​

 

[Saif]

Corruption allegations: Liability falls on govt

Discover the latest corruption allegations surrounding former police chief Benazir Ahmed and NBR officers. Political analysts argue that the liability falls on the government for failing to ensure accountability within its agencies.

en.prothomalo.com

Corruption allegations: Liability falls on govt
Qadir Kallol
Updated: 02 Jul 2024, 11: 25

Bribery and other forms of corruption runs rife

Following the revelation of the mind-boggling corruption of former police chief Benazir Ahmed and National Board of Revenue (NBR) officers Matiur Rahman and Kazi Abu Mahmud Faisal, various discussions and debates are taking place. Even the ruling class is admitting that corruption has taken an institutional shape. However, many of the MPs of the ruling party in parliament are pointing fingers at the police and administration. But questions naturally emerge, who is liable for creating an environment of such unlimited corruption?

The liability ultimately falls on the government as the political analysts feel the government mainly failed to ensure the accountability of the government agencies. They said allegations of corruption are emerging one after another and causing people worry as the democratic institutions have become completely ineffective. Although ruling Awami League leaders are not willing to accept allegations of failure, many of them admit that although the government talks about the 'zero tolerance' against corruption, it has not been effective.

On 25 June at a press conference on an India tour, prime minister Sheikh Hasina said, "Some people become greedy. They make so much money that they have to keep money abroad and afterwards they have to flee the country. What is the benefit of making money? So much money they made that they cannot stay in the country. Then what is the benefit! The people don't consider it. Making money becomes an addiction."

Agitators against corruption feel the government has no scope to avoid liabilities. Anti-corruption non-government agency Transparency International Bangladesh (TIB) executive director Iftekharuzzaman said in case of high level corruption, there is a political patronisation in collusion with the users' institutional power, businessmen or investors. High level corruption takes place in collusion with multiple parties. This picture is being exposed due to the news of corruption by some high-ups.
A number of members of Awami League in parliament strongly delivered speeches over the recent incidents of corruption allegations. However, they criticised the corrupt government officials. Some of them also said politicians are being blamed due to the corruption of the government officials. Of these MPs, Awami League joint general secretary Mahbubul Alam Hanif, speaking to Prothom Alo, said that the picture of corruption of some incumbent and former officials has been published, tarnishing the image of the government.

However, prime minister Sheikh Hasina in parliament on Saturday said the government has launched drives against corruption. She said whoever he or she is, none will be spared. Steps will be taken against those who will be involved in corruption.

Agitators against corruption feel the government has no scope to avoid liabilities. Anti-corruption non-government agency Transparency International Bangladesh (TIB) executive director Iftekharuzzaman said in case of high level corruption, there is a political patronisation in collusion with the users' institutional power, businessmen or investors. High level corruption takes place in collusion with multiple parties. This picture is being exposed due to the news of corruption in some high-ups.

The US slapped sanctions on former army chief Aziz Ahmed due to corruption on 21 May. In the beginning, on the part of Awami League it was said steps are politically motivated. But when news was published that Aziz Ahmed exerted influence to make fake NID and passport for his brothers, it gave rise to various discussions. Before the end of this issue, huge assets beyond known sources of former IGP Benazir Ahmed came up for discussion. Allegations of smuggling and corruption have been raised against the murder of Jhenaidah-4 MP Anwarul Azim.

Moreover, news of allegations of huge assets of former Dhaka Metropolitan Police (DMP) Asaduzzaman Mia has been published in different news outlets. Under such a circumstance, the Police Service Association in a statement said the mass media should be more cautious in publishing news about police. Awami League general secretary Obaidul Quader at the time said police were being attacked randomly.

Analysts feel in the beginning, some of Awami League leaders tried to deny the allegations. The statements of Obaidul Quader over various issues and the statement of the Police Association were criticised widely. Awami League leaders are now saying none will be spared. Steps will be taken in accordance with the law. However, the Anti-Corruption Commission (ACC) has become active now.

Meanwhile, the assets of NBR (now OSD) Matiur Rahman have been published. ACC traces more than one plot, flat in the name of another NBR official (first secretary) Kazi Abu Mahmud Faisal and his family members. Besides, ACC is investigating allegations against several people.

Meanwhile, the assets of NBR (now OSD) Matiur Rahman have been published. ACC traces more than one plot, flat in the name of another NBR official (first secretary) Kazi Abu Mahmud Faisal and his family members. Besides, ACC is investigating allegations against several people.
Activities of the government are being seen in the face of criticism after these incidents have been published in the mass media or social media. There are various discussions over the questions of failure inside the party.

During the discussion on the budget in parliament, AFM Bahauddin Nasim said ACC, mass media or politicians could not identify NBR official Matiur Rahman. A 'dumb animal' has identified him. He also said whether there are such Matiurs, agencies concerned need to be identified before goats or any other dumb animal is identified.

Many of the leaders at the government policy making level are talking about whether there is any conspiracy behind the revelation of recent incidents. They are giving statements that the allegations of corruption are being brought randomly as part of a conspiracy from home and abroad. There are also discussions that the liability falls on the government whether it is admitted or not as the image of the government involves it.

But no special drive or plan is noticed to identify those who are involved in corruption. Cases or legal steps in connection with recent incidents are being talked about. Speaking to Prothom Alo, law minister Anisul Huq said agencies concerned including ACC work independently to ensure accountability. So those agencies will fix whether special measures will be taken or not. He said the government has not changed its policy towards zero tolerance.

The other leaders at the top level of the government are talking in the same tune. ACC is also not talking about any special plan under the current situation. ACC commissioner Md Johurul Haque, speaking to Prothom Alo, said the action against the corruption of ACC continues. Under the current procedure, widely-discussed incidents are being investigated and actions are being taken accordingly.

The agitators against corruption have questions over the stance of the government. They feel there was an attempt to avoid liabilities despite revelation of information of unbelievable corruption. Earlier, in 2019, drives were conducted against the casino. Most of the cases filed at that time are not yet disposed of. There was a huge outcry in 2011 after five organisations including Hall Mark embazzled Tk 35 billion from Sonali Bank. Trial of only one of 11 cases in connection with the incident has been finished.

TIB executive director Ifthekharuzzaman said there is a doubt whether it is just being said for the sake of saying on the part of the government that steps would be taken against Benazir , Matiur and others.​

 

[Saif]

S Alam must pay Tk 3,538cr in unpaid VAT: HC

The High Court said on Monday that S Alam Vegetable Oil Ltd and S Alam Super Edible Oil Ltd must pay unpaid Tk 3, 538 crore Value Added Tax that they evaded in...

www.newagebd.net

S Alam must pay Tk 3,538cr in unpaid VAT: HC
Staff Correspondent 02 July, 2024, 00:12

Mohammed Saiful Alam

The High Court said on Monday that S Alam Vegetable Oil Ltd and S Alam Super Edible Oil Ltd must pay unpaid Tk 3, 538 crore Value Added Tax that they evaded in three tax years between 2019 and 2022.

The bench of Justice Zafar Ahmed and Justice Sardar Md Rashed Jahangir said this when deputy attorney general Samarendra Nath Biswas told the court that the companies would not pay the unpaid VAT if their writ petition was entertained.

The court, however, issued a rule asking the National Board of Revenue to explain in 10 days why its notice on June 9 asking the firms to pay the VAT would not be declared illegal.

The court also set July 15 for a further hearing of the writ petition.

The DAG told reporters that there would be no ban on the NBR collecting the unpaid VAT from the companies as the High Court refused to stay on the realisaiton of the demand.

The companies' lawyer, Ahsanul Karim, told the court that the revenue board demanded the VAT without exhausting the legal process relating to their objection, the appeal against the demand.

DAG Samarendra Nath Biswas told the court that the revenue board gave the companies three deadlines to submit their replies.

According to an audit carried out by the NBR's VAT wing, S Alam Vegetable Oil Ltd and S Alam Super Edible Oil Ltd have unpaid VAT and a consequent penalty worth over Tk 7,000 crore, as they allegedly evaded VAT through various means, including by presenting lower purchase and sales data in VAT returns between 2019 and 2022.

During the period, the two companies, owned by Chattogram-based businessman Mohammed Saiful Alam, evaded Tk 3,538 crore in VAT, for which they were fined another TK 3,531 crore, said the audit report.

Of the amount, S Alam Vegetable Oil Ltd allegedly evaded Tk 1,917 crore and S Alam Super Edible Oil Ltd Tk 1,621 crore in three years from the financial years 2019-20 to 2021-22, according to the audit report submitted in October 2023 and the subsequent review report submitted in May 2024.

NBR came up with the unpaid VAT claims after analysing the VAT returns and the financial statements audited by the two companies› CA firm as well as their written response to the VAT Commissionerate.

The audit was carried out by the field office of Customs, Excise & VAT Commissionerate, Chattogram, and was subsequently reviewed by a five-member committee headed by an additional commissioner, Chattogram VAT Commissionerate, which drew the same conclusion.

The field office audit team submitted its report on October 2, 2023.

On June 9, the Customs, VAT & Excise Commissionerate, Chattogram, in its adjudication orders asked the companies to pay the 'evaded VAT' worth Tk 3,538 crore along with the penalty of Tk 3,531 crore and applicable interest to the state treasury within 15 working days.

The deadline ends on July 3. The two companies have 90 days to appeal by paying 20 per cent (over Tk 700 crore) of the VAT claim.

The VAT office came up with the findings by comparing the sales data given in the VAT returns and the annual financial statements from 2019–20 to 2021–22 that the companies submitted to the income tax office in Chattogram.

The VAT Commissionerate said that the companies showed 'deflated sales in their VAT returns' than in their annual reports, audited by a chartered accounting firm, and submitted to the tax authorities by the companies themselves.

As per the audited reports from FY2019-20 to 2021-22, total sales of S Alam Vegetable Oil Ltd were Tk 12,725.95 crore, while the reported sales by the organisation in the VAT returns were Tk 2,401.92 crore.

The company did not present sales worth Tk 10,324 crore in the VAT returns.

Bedside, S Alam Super Edible Oil Ltd›s sales value in its audited financial statement was Tk 12,850.48 crore but in the VAT return, the figure was Tk 3,620.63 crore, which is Tk 9,229.84 crore less than that presented in the audited reports.

During its audit, the field office sought explanations from the companies and asked them to appear in a hearing on October 30, 2023, but both companies submitted a written response and sought more time to be given detailed information in writing.

The Commissionerate office accepted time extensions for both companies three times, and the companies submitted their written response on December 28, 2023, seeking withdrawal of the charges after a review.

Following the written submission of the two companies and their appeal for a review of the unpaid VAT claims, the Customs, Excise & VAT Commissionerate formed the five-member committee, which submitted its report on May 21 this year after examining the audit report.

In its letter, S Alam admitted it showed excess transactions to avail of bank loans.

'Bank loans are needed to operate this large company. For availing bank loans, we have to show excess transactions, which is why excess sales and purchases of raw materials have been shown in the financial reports audited by the CA firm,' said both letters of the companies.

They also said that excess sales value had been presented in the audited reports by the CA firm to get loans from banks, but VAT returns had been filed as per the actual sales, and VAT had been paid accordingly.

However, the VAT authorities› review report says that the purchases and sales data of any firm should be the same in all its commercial documents submitted to regulators, banks, income tax authorities, and VAT authorities.

It is a legal obligation on the part of the firm concerned that its purchase and sales data presented to the VAT office, income tax office, banks, and in the financial reports audited by CA firms should all be the same, said the review report.

'They claim that to avail loans from banks, they prepared the report by incorporating inflated purchase and sales data. If this is true, they have clearly committed a criminal offence.'​

 

[Saif]

Unbridled corruption and a minister’s reckless comment

The ruling regime should focus less on talking and more on actions, to create a conducive environment that truly eliminates corruption.

www.thedailystar.net

Unbridled corruption and a minister's reckless comment
Reckless remarks about corruption

VISUAL: SHAIKH SULTANA JAHAN BADHON

As one of the fastest growing economies in Asia, Bangladesh is currently the 35th largest economy in the world (as of 2022) and aspires to clinch the 25th spot by 2035—earning the apt label of "the emerging Asian Tiger." Grand ambitions, grander dreams and the grandest rhetoric by our politicians and policymakers make the country look all set to conquer the future.

Unfortunately, the reality is, Bangladesh is mired in multiple economic and sociopolitical challenges that would make achieving these ambitious targets considerably difficult. With a persistent high inflation (9.89 percent in May 2024), rising poverty and people's shrinking purchasing power, uncontrollable foreign exchange volatility that we are having to cushion with foreign loans, non-performing loans (NPLs) reaching an all-time high of Tk 182,295 crore, and the economy struggling to grow with the IMF repeatedly slashing growth projections, our economic hurdles ahead look overwhelming.

However, the single biggest factor that creates the major roadblock to our growth aspirations is the unbridled corruption that has permeated every layer of every organ of the governance system, crippling the nation and creating a hollow at the heart of our economy. A study titled "The state of the business environment in Bangladesh," conducted by the Centre for Policy Dialogue (CPD) and World Economic Forum (WEF), identified corruption as the most problematic factor in doing business in Bangladesh in 2023, with 67.6 percent of respondents pointing to high levels of corruption. In the Corruption Perceptions Index (CPI) 2023 by Transparency International, Bangladesh secured the 10th lowest score at 24 out of 100. In South Asia, Bangladesh holds the second lowest position, just above Afghanistan. This is the lowest score for the country since 2012.

Recent reports on former law enforcement officials and revenue collectors being nose deep in various forms of corruption and criminal activities, including land grabbing and insider trading, as well as a sitting MP being involved in smuggling, which got him killed in a foreign country, are disturbing and portrays a picture of a society that is rotting from the inside.

But what is more alarming is the specious—almost defensive—narratives by the powers that be that have emerged following these revelations. The Bangladesh Police Service Association (BPSA), for instance, has come down heavily on the media in the aftermath of the investigative reports into the misdeeds and corruption of former and current police high-ups, terming these reports as "partial," "ill-motivated," and "exaggerated"—a smear campaign—and warning them to refrain from publishing such reports going forward. Meanwhile, a high-profile minister of the current regime has also made a bizarre comment about the latest wave of corruption revelations.

While the BPSA statement is reckless and paints a picture of a public institution that is trying to cover up the criminal activities of its members, rather than taking a rectification approach, the comment by the minister comes off as blatantly apologetic for the corrupt and corruption as a practice.

The minister's comment demands in-depth scrutiny for understanding. There are three main points to the comment: the universality of corruption and acceptance of corruption in his own ministry, as well as among politicians; asking for introspection for those who are asking for accountability of the corrupt officials; and reiteration of the government's zero tolerance policy against corruption.

To start with, saying that corruption is universal is tantamount to normalising it, which is undesirable and contrary to a lawmaker's oath of office, "I will faithfully discharge the duties of my office according to law: That I will bear true faith and allegiance to Bangladesh: That I will preserve, protect and defend the Constitution and the laws of Bangladesh: And that I will do right to all manner of people according to law, without fear of favour, affection or ill-will." While it is a positive sign that the minister has accepted that corruption is pervasive among his own political network and within his own ministry, one cannot help but ask: what has he done so far to prevent the spread of corruption among those he knows are corrupt, and how many have been held accountable for their actions?

The second point was perhaps a jab at the opposition parties who are blaming the disintegration of the integrity of the governance apparatus, resulting in rampant corruption among bureaucrats. However, just because previous governments have been engaged in corruption does not give the current regime the scope to take it as a normal practice, or allow it to evolve in new dimensions. So, there is no reason for anyone to look into the mirror before calling a spade a spade.

Finally, while it is nice to hear repeatedly that the government remains committed to its zero tolerance policy against corruption, it has unfortunately remained lip service only, and we are yet to see any meaningful actions being taken to walk the talk.

To put it short, the minister's comments are not only provocative, offensive and irresponsible, but at times a violation of his own oath as a member of parliament. There is no way we expect a responsible public representative to make such careless remarks that would put into question not only their own morals, but also the moral authority of the government. No wonder we have reached a point where bureaucrats and politicians alike are engaged in heavy corruption, plundering the hard-earned money of the people, with almost no consequences.

The minister owes the people an explanation of his remarks and an apology at the very least. And the ruling regime should focus less on talking and more on actions, to create a conducive environment that truly eliminates corruption from our governance system and supports our growth aspirations.

Tasneem Tayeb is a columnist for The Daily Star.​

 

[Saif]

Relaxing service rules will only exacerbate corruption

Govt should instead toughen up rules for employees given current trends

www.thedailystar.net

Relaxing service rules will only exacerbate corruption
Govt should instead toughen up rules for employees given current trends

VISUAL: STAR

In another questionable move with the potential to exacerbate corruption, the government seems set to allow public servants to engage in stock market trading, reversing a decades-old prohibition. According to a report, the law ministry has positively vetted an amendment to the Government Servants (Conduct) Rules, 1979 forwarded by the public administration ministry. If or once it is approved, employees will be able to legally buy or sell primary shares and bonds of registered companies. This is one of the several changes being billed as necessary for a "modern and time-befitting" code of conduct. But given past experiences, we must say this is the wrong way to go about it as allowing officials to trade stocks may open a Pandora's box of unethical practices.

We don't need to go that far back in time to understand why. Matiur Rahman, a top NBR official now under investigation for corruption, allegedly made a fortune through stock market investments, using insider information, both of which are illegal. He is not alone in such pursuits. Many government employees, despite current prohibitions, are believed to be engaged in stock trading. Many have already demonstrated their willingness to exploit their power and privileged access for personal gain. Against this backdrop, legalising stock trading could widen the scope for corruption. The speculative nature of stock markets means that losses are inevitable, and when faced with losses, employees might be tempted to recoup them through illegal means.

The proposed amendment, therefore, will further weaken, rather than fortify, the ethical framework governing public officials. Unfortunately, the public administration ministry seems to be blind to such concerns. In another editorial not long ago, we commented on its proposal to relax another provision in the Government Servants (Conduct) Rules requiring officials to submit wealth statements every five years, and how the removal of such an important layer of scrutiny could encourage dishonest officials to commit crimes with little fear of detection. Over the years, we have seen how such anti-graft rules and regulations have been relaxed, sometimes even lightening penalties for proven corruption.

As we write this, news has emerged of another top official, a former additional IGP, and his wife who illegally amassed wealth worth Tk 30.35 crore while concealing information of wealth worth Tk 36.91 crore—adding to the recent disclosures of scandals involving former and current security and revenue officials. The list will only grow, whether it comes to light or not, unless we toughen up relevant rules, enhance existing oversight mechanisms, and enforce stricter penalties for violations. Government employees, because of the power they exercise, must be held to the highest standards of conduct. We, therefore, urge the public administration ministry and other authorities to refrain from further relaxing service rules.​