[🇧🇩] Corruption Watch

[Saif]

The economics of black money & the budget

Like a bee in the bonnet, the proposal in the draft budget for fiscal year 2024-2025 (FY25) to whiten black money after payment of income tax at the rate of 15 per cent has created a buzz in the media and among analysts that has superseded all other criticisms. That the reaction to the proposal wou

thefinancialexpress.com.bd

The economics of black money & the budget
HASNAT ABDUL HYE
Published :
Jun 20, 2024 21:49
Updated :
Jun 21, 2024 21:41

Like a bee in the bonnet, the proposal in the draft budget for fiscal year 2024-2025 (FY25) to whiten black money after payment of income tax at the rate of 15 per cent has created a buzz in the media and among analysts that has superseded all other criticisms. That the reaction to the proposal would elicit such a virulent response was predictable because it is not the first time this has happened. Knowing that this is going to be 'unpopular' with the vocal section of the population, the decision to go ahead with the proposed amnesty for holders of black money speaks of the desperation of the government to collect revenue from every possible source. It may also be a strategy to bring unaccounted for money from the economy that has come to have the monikers of shadow, parallel, underground and black economy. Since behind most of the vitriolic remarks by critics appears to be the assumption that the holders of black money are corrupt individuals and as such corruption would be rewarded by the proposal, it may be helpful for the discussion to shed some light on the sources of black money

Black money is earned from various sources that elude law of the land and rules and regulations regarding production, sale and distribution of goods and services and through rent seeking, all of which remain outside the tax network because of evasion. While almost all of these sources involve production and sale of goods and services illegally, the last viz rent seeking makes no value addition in the economy at the time of 'earning' and siphons off money from others, misusing power and influence. Since income from all these sources evades tax payment they are termed as 'black'. It should be pointed out that black money may result from both legally and illegally earned income when tax is not paid. Illegally earned money is kept out of tax payment to keep the sources secret lest punitive actions are taken by government law enforcers. Earners of income through legal means may resort to under-reporting with a view to paying less than the tax due. Among the earners of income through illegal means are smugglers, black marketers, drug traffickers, human traffickers, adulterers, hoarders and last but not the least hired killers. The rent seekers, on the other hand, who sponge off legal and illegal income earners belong to government servants, politicians in power, student leaders and staff of local government institutions who engage in extortionate collection of subscriptions or protection money. There may be exceptions in each category but the exceptions serve to prove the rule. The diatribe against the proposal to whiten black money in the proposed budget is mostly directed at the earners of black money through rent seeking as explained above. Given the bad name to the country in the global corruption index under successive governments, the exasperation of the critics over the proposal to whiten black money is understandable. But in finding fault on this account a distinction has to be made between black money earned through rent-seeking (corruption) and from other sources. Though some estimates have been made about the size of the shadow/ black economy, the figure (as percentage of the GDP) has not been disaggregated according to their sources as classified above. But the total size, as revealed in the studies, may lend some justification for the fiscal measure to tap this ice- berg like source for tax collection to augment the fiscal space. A modicum of insight into the murky world of the black or shadow economy through an overview may be helpful for further discussion

To be continued.................​

 

[Saif]

TYPES OF BLACK ECONOMIES: According to researchers there are three types of black economies: (a) the illegal economy; (b) the under-reported economy; and (c) the unrecorded economy.

The illegal economy consists of income produced by activities pursued in violation of laws defining the scope of legitimate forms of commerce. Extortion, toll collection, drug dealing etc are part of the illegal economy. The unreported economy seeks to evade the institutionally established fiscal rules as codified in the tax code. Under-the-table-employment and untaxed private transactions that are otherwise legal fall in this category. The unrecorded economy refers to economic activities that circumvent the institutional rules defining the reporting requirements of government statistical agencies. This can be due to deliberate concealment of information for legitimate or illegitimate reasons or due to practical difficulties associated with data collection.

KEY TAKEAWAYS: The key takeaways from discussions and analyses by economists of black money in recent years in a nut shell have been the following:

(i)The black economy includes all economic activity in a given economy that occurs outside or in violation of the prevailing laws and regulations of a country; (ii) Individuals may break or ignore the rules imposed when governments intervene, tax or regulate markets. This can produce net benefits in some cases (making scarce goods available) or costs to society as in the case of drug trafficking; (iii) Activity in the black economy is often illegal ,usually untaxed, and rarely recorded by official economic statistics. In fact, the activity may not consist of formal market transactions at all, making it very difficult to estimate.

To be continued.............​

 

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HOW DOES THE BLACK ECONOMY STAY HIDDEN: Because tax evasion or participation in a black market activity is illegal, those who engage in such behaviour often attempt to conceal their activities from government or regulatory authorities. Black economy participants traditionally choose to transact their illegal activities in cash, since use of cash does not leave a footprint. More recently, crypto-currencies have opened up new possibilities for payment, particularly over the dark web. Different types of underground activities are distinguished according to the institutional rules that they violate.

HOW BIG IS THE BLACK ECONOMY IN BANGLADESH: Officially no estimate has so far been made by government regarding the size of the black economy. According to newspaper sources, during the discussion with the IMF review mission last month the concerned NBR officials reportedly mentioned that 30 to 40 per cent of Bangladesh economy remain outside the formal economy, accounting for Tk 136 to Tk.180 billion. Instead of using the term 'black money' this was euphemistically described as 'unaccounted for money' by them. The possibility of tapping this source might have been discussed with the IMF review mission but nothing can be said on this with certainty. But there is the precedence of taxing black money and declaring amnesty on this after bringing the black money within the formal economy in the recent past . Though the move was vehemently opposed by analysts and extensively commented on in the media, the government went ahead with the policy initiative with regard to black money. Instead of riding roughshod over objections raised this time, the government should expatiate the rationale for legitimising the illegitimate wealth. It should, if there are grounds available, argue that it is not immoral at all to allow whitening of black money and neither the policy proposal is meant to condone corruption. This two-fold argument can become all the more potent if an idea is given about the size of the black economy. As everyone knows, when a predatory animal is not identified as dreadful in a recognisable form, attempts to restrain it with tools in hand lacks conviction for the general public, not to speak of the knowledgeable section.

A research paper by an official of the ministry of finance, government of Bangladesh on the subject was made public through the official portal of the ministry in 2011. Though it is not fully an official document, its release through the official channel confers on it a semi-official status. In this research paper the author has pointed out that the underground economy in Bangladesh was only 7 per cent of GDP in 1973. By 2010 the size of the black economy rose to account for as high a percentage as 62.75 per cent of GDP. The researcher based his study and arrived at his estimate using the model by Tanzi (1980, 1983) after some modification to fit into Bangladesh case. He used currency demand method including Tanzi's model, building upon regression models with multiple time variables. The Currency Demand Approach assumes that tax is the main variable impacting on the size of the black economy and that holders of black money use currency to avoid paying taxes. The main assumptions underlying the Currency Demand Approach are: (i) velocity of illegal money equals the legal money; (ii) the velocity of illegal money equals to the velocity of narrow money (M1) and (iii) velocity of illegal money equals to the average velocity of legal money and narrow money. It is under assumption (iii) that the size of black money was estimated by the researcher at 62.7 per cent of GDP in 2010 (Sk Towhidul Haque, Underground Economy of Bangladesh— An Econometric Analysis, 2010)

To be continued.....................​

 

[Saif]

Friedrich Schneider, an European economist estimated the black economy of 110 countries in 2004 including developed, developing and emerging economies using Currency Demand Approach and dynamic multi- factor and multi-variable (MIMIC) approach for estimating the range of the shadow economy. His findings show that Bangladesh had a shadow economy equal to 28.4 per cent of GDP during 1990-90, 32.4 per cent during 1997-99 and 35.6 per cent during 1990- 2000 periods.

Kabir Hassan, another Bangladeshi economist, used an econometric model in 2008 to estimate the underground economy and analysed its impact on government fiscal position, particularly on allocation of resources in the aggregate economy. He used both the Currency Demand Approach and the Dynamic Multi- factor and Multivariate (MIMIC) method. According to the Currency Demand Approach he found the shadow economy in Bangladesh averaging 20 per cent during 1975-2008 but on the basis of the MIMIC approach his estimate of the black economy stood at 29 per cent of GDP in 1996 and 46.60 per cent in 2004.

The historical trend of the underground economy/black economy in Bangladesh under different approaches shows that the size under UGDPM3 in FY 2000 was 37.24 per cent of GDP which is consistent with the findings of Schneider (2004). Under UGDPM3 the underlying assumption is velocity of illegal money equals to the average velocity of legal money.

Though the findings of the empirical works on the black economy varies in details because of the differences in assumptions and econometric models used, the size has been shown to increase dramatically from the early seventies to early 2000, averaging over 30 per cent of GDP.

LEGALISING THE BLACK MONEY: Assuming that roughly 50 per cent of the black money has been laundered abroad, the remaining 50 per cent amounts to a hefty size (Tk.136-Tk180 billion, according to the unofficial estimate by NBR disclosed informally to the visiting IMF mission recently). The question that begs for an answer is what are the costs and benefits of this hidden money being legalised?

The first objection raised by critics of the proposed amnesty is on grounds of ethics and morality. Declaring amnesty to black money holders is considered immoral by many as it encourages corruption and discriminates against the honest tax payers, according to them. The judgement on this debate, however, will depend on what terms the facility of amnesty is being offered. If the terms are punitive in nature (taxes to be paid by black money holders at a rate higher than the rate at which honest tax payers pay taxes) and puts a ceiling on the amount that can be made legitimate ( a maximum of say, Tk 10 crore allowed to be whitened), then the logic behind the criticism about immorality can be removed. But the budget proposal to legalise black money after payment of 15 per cent income tax, with no ceiling of the amount that can be whitened does not satisfy this requirement to obviate the morality issue. This has to be done to assure honest taxpayers that they are not being discriminated through preferential treatment of black money holders and to send the message to the denizens of the underworld that amnesty for ill gotten money comes with the price tag of a penal rate of tax and a ceiling of the amount that can be made white. If this modification is not made to the proposal to legitimise black money, the government cannot extricate itself from the moral bind in which it finds caught now.

To be continued...............​

 

[Saif]

The moral argument against amnesty has to be nuanced and not absolute. It cannot be argued that black money per se is out of bounds of the formal economy. Benefit-cost analysis of taxing black money with a ceiling has to be compared with the scenario where it is kept out of the formal economy under all circumstances as a matter of policy. If the amount of money represented by the black economy is as big as even the most conservative estimate puts it, foregoing the tax revenue on this will mean a high opportunity cost that a cash strapped government can ill afford. Allied to this is the benefit of addition to investment in legal sectors. After the morality argument is taken care of satisfactorily, economic cost-benefit analysis of legalising black money should be front and centre of policy making. As of now very little by way of addressing the morality argument and pointing out the cost- benefit comparisons has been made by policy makers.

An economist of global repute while discussing morally as an ideology melded it with utility of utilitarianism and wrote: ' A society cannot exist unless its members have common feelings about what is the proper way of conducting its affairs'. (Joan Robinson, Economic Philosophy, 1963). Perhaps her words are as relevant today as they were when written.​

 

[Saif]

Whitening black money: 3 MPs slam govt for keeping the provision

Two ruling Awami League MPs and a Jatiya Party MP today in parliament criticised the government for keeping the provision of whitening the black money in the proposed budget for 2024-25 fiscal

www.thedailystar.net

Whitening black money: 3 MPs slam govt for keeping the provision

Two ruling Awami League MPs and a Jatiya Party MP today in parliament criticised the government for keeping the provision of whitening the black money in the proposed budget for 2024-25 fiscal.

They are Pran Gopal Datta from Cumilla-7, former health minister Zahid Maleque from Manikganj-1, and reserved seat JP MP Nurun Nahar Begum.

"As a taxpayer I have to pay more than 30 percent tax if I have Tk 30 lakh. But the person who did not show the money last year is legitimising that undisclosed income by paying 15 percent tax. This will make the taxpayers reluctant to pay taxes," Pran Gopal Datta said.

Datta, a physician and former VC of Bangabandhu Sheikh Mujib Medical University, said, "We always talk about black and white money. But informal grey-money to tax evasion in the informal economy that is not taxed and cannot be controlled in any position."

He said the finance minister did not say anything about grey money in the budget speech.

"Grey-money is worse than undisclosed income. Money laundering cannot be stopped unless it is curtailed," Datta also said.

Often associated with activities such as tax evasion and money laundering, grey money refers to funds that are obtained via legal means but are not fully reported or taxed.

Zahid Maleque, also a former health minister, said they don't want the provision of whitening the black money in the proposed budget.

"We will have to curb corruption and tax rate to reduce black money," he added.

He said it is the while-collar people, not the low-income ones or industrialists who create black money.

Jatiya Party MP Nurun Nahar Begum said with the provision of whitening the black money, many criminals will be able to whiten black money in the country, besides laundering those abroad.​

 

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Wealth accumulation: Heaps of stocks expose Matiur’s wrongdoing

NBR official Md Matiur Rahman, who has come under the scanner amid controversy over his wealth, has made a big fortune through investments in the stock market, raising questions about the means he applied in the process.

www.thedailystar.net

Wealth accumulation: Heaps of stocks expose Matiur's wrongdoing

NBR official Md Matiur Rahman, who has come under the scanner amid controversy over his wealth, has made a big fortune through investments in the stock market, raising questions about the means he applied in the process.

In a recent interview with private television ntv, Matiur, who was yesterday removed from NBR and attached to the finance ministry, admitted that he used his expertise and insights about the capital market to buy shares of ailing but potential companies to make financial gains.

In his own admission, the career tax official would sit with owners of listed companies and visit firms to identify their weakness and offer solutions for growth. In essence, he would buy company shares in their rainy days and trade them when the share value shot up.

"This gives you a good gain," he said, adding that he also offered consultancy for initial public offering (IPOs) to help companies float shares to raise money from the public.

Matiur's admissions offer vital clues as to how people with power and influence over public institutions can become a money-making machine. What happened in Matiur's case is simple yet intriguing: he entered the share market with insider information, an unlawful practice as per the capital market regulations, to mint money.

The regulation against inside trading is meant to safeguard general investors against those with privileged information who can make gains or avert losses that the general investors cannot.

The controversy over Matiur and his family's wealth comes amid ongoing investigations and public discussions about massive wealth of a number of other top current and former government officials and their family members.

An initial tally by The Daily Star shows he and his company held more than 3 crore shares of at least 10 companies – but this figure may rise.

Matiur, who also worked at Chattogram Customs and Large Taxpayer Unit (LTU), VAT, told ntv on Wednesday that he started investing in the capital market in 2008.

He also acknowledged that he made "abnormally high" money from the shares of Fortune Shoes. He bought the company's shares at Tk 8 whose face value was Tk 10, and sold them at Tk 54 each.

"I had a deal with the owner of the shoemaker to offer consultancy to bring the company to the stock market. In return, the owner gave me shares at Tk 8."

He did not respond to our calls and text messages over the last two days.

According to the Companies Act, a company can sell shares at a discount price but with approval from the High Court, and it must be shown in the company's financial reports.

However, the company did not take any approval and did not show it in the financial report of 2015-16 when it got listed. Moreover, the IPO prospectus showed that all shareholders bought shares at face value of Tk 10 each.

Under service rules, government officials cannot work as consultants to facilitate companies to be listed in the capital market. The securities rules also have no option for any individual to offer consultancy related to IPO listing.

It is the job of merchant banks with issue management licences, and there are 66 such merchant banks in Bangladesh, according to BSEC data.

The merchant banks offer their service against a fee, and cannot accept any shares from the company, according to company listing regulations of 2015.

"The issue manager is in no way connected with the issuer and does not hold any of its securities," the regulations say.

Faruq Ahmad Siddiqi, a former chairman of BSEC, said a public service-holder should not offer such consultancy. The securities rules also have no option for that.

To read the rest of the news, please click on the link above.​

 

[Saif]

Corruption, irregularities handicap BSMMU unit

The Super Specialised Hospital of Bangabandhu Sheikh Mujib Medical University could not become fully operational two years after its inauguration due to the...

www.newagebd.net

Corruption, irregularities handicap BSMMU unit
Rashad Ahamad 24 June, 2024, 23:59

The Super Specialised Hospital of Bangabandhu Sheikh Mujib Medical University could not become fully operational two years after its inauguration due to the absence of the required manpower and logistics.

The new administration of the hospital said that they had found corruption and irregularities at all stages, including in the recruitment of manpower, in the purchasing of equipment and renting of spaces to facilitate services at the specialised hospital.

On September 14, 2022, prime minister Sheikh Hasina inaugurated the 750-bed specialised hospital, which promised to offer medical services that remained unavailable in most other hospitals in Bangladesh.

Following the opening, the hospital's administration began offering some outdoor services, primarily doctor consultations, because other resources, such as diagnostic tests, were not available.

Most allegations of corruption and irregularities were directed at BSMMU's immediate past vice chancellor, Md Sharfuddin Ahmed, during whose tenure the hospital was constructed.

Sharfuddin denied the allegations and shifted the blame on the present administration for slowing down the process of making the hospital fully operational.

He claimed that all purchases and appointments were approved by a university syndicate committee.

'I did nothing on my own. If there were any irregularities, committee members should be held accountable,' he said.

BSMMU registrar Professor ABM Abdul Hannan said that the new administration that took charge of the medical university two months ago was trying to make the hospital functional soon.

To read the rest of the news, please click on the link above.​

 

[Saif]

Process on to prepare list of loan defaulters, finance minister tells Parliament

Finance Minister Abul Hassan Mahmood Ali on Monday said a process is going on to prepare the list of top loan defaulter persons and organisations. The minister said this in reply to a tabled query of ruling Awami League MP from reserved seat Farida Yasmin. In her question, Farida Yasmin wanted to

thefinancialexpress.com.bd

Process on to prepare list of loan defaulters, finance minister tells Parliament
Published :
Jun 24, 2024 23:03

Finance Minister Abul Hassan Mahmood Ali on Monday said a process is going on to prepare the list of top loan defaulter persons and organisations.
The minister said this in reply to a tabled query of ruling Awami League MP from reserved seat Farida Yasmin.

In her question, Farida Yasmin wanted to know the names of top 30 loan defaulter persons and organisations and how much money they have taken from banks.

In reply to another query of AL MP Nurunnabi Chowdhury from Bhola-3, the finance minister said the government and the Bangladesh Bank have taken multiple permanent and effective measures to bring discipline in all banks and financial organisations.

In his question, Chowdhury wanted to know whether the government takes any permanent and effective measures to stop loan scams in all banks and financial entities.

In reply, the finance minister said the government has taken four measures including amended the Bank Companies Act, 1991 by adding a new section (27B) for registration of wilful defaulters.

Bangladesh Bank through BRPD Circular No-06 dated: March 12, 2024 has issued guidelines to scheduled banks regarding identification and finalisation of wilful defaulters and action taken against them.

Regular inspection and monitoring activities are ongoing by the bank inspection departments (on-site and off-site) of Bangladesh Bank with the aim of bringing credit discipline to all banks and financial institutions.

By 30 June 2026, Bangladesh Bank has adopted a specific action plan to bring down the classified loan ratio of the entire banking sector to below 8 per cent and ensure corporate governance in the banking sector.

Besides, the minister also said The Finance Company Act, 2023 has been enacted by modernizing the related laws to ensure transparency and accountability of finance companies, management, systematic management, financial structure.

In order to stop the loan fraudsters of financial institutions, various preventive measures have been taken including identification of defaulting borrowers and willful defaulting borrowers following the prescribed process and taking appropriate legal action against said borrowers.

While replying to a query of AL MP M Abdul Latif from Chattogram-11, the finance minister said at present, due to the creation of investment opportunities in various public and private sectors, the depositors are directly investing in various schemes, small industries and income-generating sectors.

"As a result, not because of lack of confidence and inflation, but because of various investment projects are attractive and opportunities for direct investment have been created, the deposits of financial institutions have decreased to some extent," the minister said.

In his question, Latif wanted to know whether it is true that financial institutions lost 95,000 depositors in the last financial year 2022-23 due to lack of confidence and inflation.

In reply to a query of AL MP from Chattogram-1, Mahbubur Rahman, the finance minister informed the House that Currently there is no liquidity crisis in any bank operating in Bangladesh.

However, the minister said, high non-performing loans, capital shortages and liquidity problems exist in some banks.

In order to solve all these problems, one officer of Bangladesh Bank was engaged as an observer in the board of directors of 9 banks and as a coordinator in 7 banks.

In reply to another query of the same MP, the minister informed the House that inflation will come under control in the next financial year due to the reduction in the prices of fuel, food products and fertilisers in the global market, initiatives to maintain the food and supply situation and all the activities that are going on to protect the helpless poor people.

"Accordingly, the annual average inflation is estimated to be 6.5 per cent at the end of the fiscal year 2024-25," the minister added.

 

[Saif]

Postal officials embezzled Tk 55 crore: Palak

Postal officials have misappropriated Tk 55 crore from both people and departmental resources, said Zunaid Ahmed Palak, state minister for Posts, Telecommunications, and Information Technology today.

www.thedailystar.net

Postal officials embezzled Tk 55 crore: Palak

Zunaid Ahmed Palak. Photo: Collected/File

Postal officials have misappropriated Tk 55 crore from both people and departmental resources, said Zunaid Ahmed Palak, state minister for Posts, Telecommunications, and Information Technology today.

"We have found out that Tk 55 crore was misappropriated by postal officials nationwide, and I have already written to the ACC chairman, urging him to action," he said.

A majority of these fraudulent activities involve postal officials embezzling people's deposits without issuing official documentation for the purchase of government savings certificates.

The state minister made these remarks while speaking to reporters following a workshop jointly organised by the a2i (Aspire to Innovate) Information and Communication Technology Division, and the International Telecommunication Union at the Amari Dhaka hotel.

The minister said they recently became aware of the financial irregularities at post offices when Parul Begum, a resident of Tanore in Rajshahi, attempted suicide after failing to recover Tk 2 lakh from the local postmaster.

The postal official did not provide her with any official documents even though she bought savings certificates, he said.​

 

[Saif]

AL MPs blast corruption

Several Awami League lawmakers on Wednesday became scathingly critical of the rampant corruption in the country...

www.newagebd.net

AL MPs blast corruption
Staff Correspondent 27 June, 2024, 00:38

Several Awami League lawmakers on Wednesday became scathingly critical of the rampant corruption in the country.

Lawmaker and AL joint general secretary AFM Bahauddin Nasim on Wednesday came down heavily on the associations of various professional bodies for giving statement in favour of corrupt government officials.

He also said that by giving statement in favour of corrupt individuals these associations were taking responsibilities of the corruption on their own shoulders.

He made the remarks while speaking in the parliament on the general discussion on the proposed budget for the 2024–25 fiscal.

He also stressed finding out other corrupt government officials and urged the government bodies to act accordingly.

He said that politicians did not take action or take sides when allegations of corruption or misdeeds are raised against other politicians.

'Rather, they raised their voice to take political and legal actions. That is the greatness of honest politicians. But sometimes we see when there are corruption allegations against a particular public servant or an official of any private, semi-government organisations or law enforcement agencies, a statement is produced on behalf of the corrupt individual,' he said.

In other words, he said, the responsibility of the allegations against the particular individual is taken by those organisations.

'This responsibility falls on the entire organisation. We have to get out of this,' he said and called for initiatives to implement prime minister Sheikh Hasina's zero-tolerance policy against corruption through strict action against corrupt individuals, institutions, government or private agencies or organisations.

Nasim also stressed the importance of reducing the amount of defaulted loans through stern measures against the defaulters.

He said that loan defaulters, money launderers, looters of bank money, and those who do price hikes must be identified.

'I think it is necessary to prepare a list and present it to the nation,' he added.

The AL leader called for forming a special task force to protect people from the hands of this vicious, totalitarian, self-seeking gang.

He said that all the achievements of the country were gained under the leadership of the Awami League and politicians.

'But a cabal of usurers or foot-licking dogs of foreign masters corrupt politics and political leadership whenever they get a chance,' he blasted.

On June 21, the Bangladesh Police Service Association issued a statement condemning what it termed a 'smear campaign' orchestrated by certain media outlets against current and former members of the police force.

BPSA termed recent media reports against its retired and serving officials as 'partial, ill-motivated, sweeping and exaggerated' and also requested the media to be more cautious while publishing reports on the force.

The statement came amid legal action over allegations of accumulating huge illegal wealth by former inspector general of police Benazir Ahmed and his family based on media reports.

Recently, former Dhaka Metropolitan Police commissioner Asaduzzaman Mia also made headlines over allegations of amassing illegal wealth, while expelled president of the National Board of Revenue's Customs, Excise and VAT Appellate Tribunal Matiur Rahman was transferred to the Internal Resources Division of the finance ministry following a recent controversy over his wealth.

The controversy regarding Matiur's wealth surfaced after his son Mushfiqur Rahman Ifat posted a photo of a sacrificial goat on social media and claimed to have bought it for Tk 12 lakh.

This raised questions about his father's income at this grade (grade-1) with a basic monthly salary of Tk 78,000.

Later, Ifat's photos with cars of different brands surfaced on social media and information on Matiur's huge wealth, including flats and resorts in various places, including Dhaka, Gazipur and Narsingdhi became public.

Besides, Narail-1 AL lawmaker BM Kabirul Haque said that corruption had been institutionalised in the country.

He said that people involved in procurement and project implementation committed massive corruption and made wealth worth hundreds crore of taka.

Kabirul Haque demanded drastic action against those involved in corruption saying that lawmakers had no scope of doing corruption as they were not involved in any procurement or project implementation.​

 

[Saif]

Social media, corruption and that goat

NOTHING works like social media when it comes to spreading news as it shows regularly in everyday life. Scandals, sports religion or bed bug spray are all now dependent on social media. If it is not there, it is nowhere. And, this is increasingly becoming clear that while the official, formal...

www.newagebd.net

Social media, corruption and that goat
Afsan Chowdhury 26 June, 2024, 22:04

NOTHING works like social media when it comes to spreading news as it shows regularly in everyday life. Scandals, sports religion or bed bug spray are all now dependent on social media. If it is not there, it is nowhere. And, this is increasingly becoming clear that while the official, formal and state-inspired agencies, including mainstream professional media, can be reined in when needed, social media has taken over this sector more than one would like to admit.

The kind of image the ruling powers would like people to think they have is shattered or was shattered long back and no one is pretending that it does. One can be in denial about it, but the fact remains that it will be very difficult to sell the idea to the people — read: social media consumers — that officials and power players whether police chiefs or members of parliament or senior officials are clean. There are far too many videos of bribe-consuming officials and their way of life on social media to argue otherwise.

What, of course, saves them is the fact that nobody really thought otherwise and, so, the exposure of corruption on social media has considerable interest, but more of the entertainment type rather than content on the state of governance?

Which is why the question is longer about the size of goats, resorts and so on but why such a deluge of news right now? Why suddenly this rush to expose and the felling of the biggest trees that makes regimes feel safe, secure and well-resourced? Who is responsible?

Social media, status and the wealthy

THE latest episode centred around one Iffat, the son of Matiur, a very senior revenue board official now famous for his wealth and able to carry on, no matter who accuses him of what. Iffat boasted on a social media posting of the large high-pedigree goat that he had bought during Eid-ul-Azha.

As is bound to happen when any post goes viral, people began to dig into his background and the family connection with the government official was made. Matiur was son of a senior official and not exactly an unknown content. Soon, many other details began to pop up. But the clincher came from Matiur himself when he denied that Iffat was his son. And the proverbial *&*&*&*& hit the ceiling.

Within hours, it had become one of the biggest social media sensations with everyone pitching in. Even Awami League politicians said that both were father and son. And then came the deluge of information on the kind of riches Matiur had managed to accumulate in his working years. It ran into hundreds of crores.

The riches, his own and that of others

THE list is huge and multifarious with landed property, resorts, parks, buildings, business establishments and on and on. Suddenly, he was threatening to take over Benazir in terms of accumulation. Unlike the former inspector general of police, he had not been accused of promoting 'encounter' death and had the US breathing down his neck but he seems to have been a facilitator of wealth making, his own and that of others.

In a Desh TV talk-show, a senior official remarked that when he was transferred, in 2007, senior army officials including CMLA Moin U Ahmed asked for his transfer order to be rescinded. When the head of a military government makes such a request, it shows the status. The range of his clout was obvious and that is why his fall is more than a simple act of getting tough on corruption.

Somewhere some wheels may also be moving but there is no doubt that social media has become a new factor even in politics, a new pressure space which cannot be ignored even if one wants to.

Is a crackdown on?

THAT some kind of whipping and leashing is on has become a growing speculation. Several police officials have been targeted and Benazir, Asad and others are being named on social media and none is saying whether they are in or out of the country.

Such pieces of news are making it to mainstream media which means official endorsement is there of such media distribution. That these people were into money making is no secret but nothing was ever done against them. Matiur had four major charges and investigations and he escaped each time with the proverbial 'no evidence found' tag every time. Then, why did he stumble?

A few years back, a crackdown was launched against politicians centred on gambling, including casinos. Several politicians were hauled in and they spent time in jail and hospital beds, awaiting trial, which never came. However, there was one prominent 'accused' GK Shamim but he was not a serious politician and still remains inside as sort of warning to others one guesses. Gambling of many forms are back naturally nor many ways of making money.

Given the number of civilian bigwigs of the bureaucracy variety who are being held or chased, is it a similar campaign to let the bureaucracy know that the leash is ultimately in the hands of the powers that be? No one can say as none knows, but there is no question that social media is something none can ignore.​

 

[Saif]

Govt must bring back laundered money to ease economic crisis

JUNE 24 was a day when the demand for power fell 1.88GW short of the demand for 14.89GW, up from a shortage of 278MW against the demand for 14.38GW only 24 hours ago although the installed power generation capacity is 27.51GW. The ongoing mild-to-moderate heatwave that is reported to be sweeping...

www.newagebd.net

Govt must bring back laundered money to ease economic crisis
27 June, 2024, 00:00

JUNE 24 was a day when the demand for power fell 1.88GW short of the demand for 14.89GW, up from a shortage of 278MW against the demand for 14.38GW only 24 hours ago although the installed power generation capacity is 27.51GW. The ongoing mild-to-moderate heatwave that is reported to be sweeping over 31 districts in the divisions of Dhaka, Rajshahi and Khulna beginning three days ago pushed the demand for power up by about 4GW, leaving both the government and people struggling to cope with power outages. People faced power cuts for up to 16 hours in places on the day. An analysis of the daily power generation report that the Power Grid Company of Bangladesh released shows that 114 out of 150 power plants were either partially or completely out of order for one reason or another on the day. Thirty-three plants faced technical problems such as engine or machine troubles, a dozen plants were under maintenance and 18 did not run as their contracts expired. But 46 gas- and furnace oil-run power plants could not run because of fuel shortage. The economic downturn that has been persisting for more than two years seems to be holding back the government from spending on fuel for power.

The situation worsened with the shutdown of a floating storage and re-gasificaion unit after Adani Power had shut down a unit at the 1,600MW Godda plant arguably for maintenance, which Bangladesh authorities say was unscheduled. What seems to be the problem is that the government owes more than $3 billion, as the power ministry says, to power producers at home and abroad, And, the amount includes $500 million in outstanding bills to Adani Power. The decreasing idle funds from state-owned and autonomous enterprises are also reported to have exacerbated the government's ability to manage the ongoing fund crisis. Finance Division officials say that about Tk 350 billion in the 2020 and 2021 financial years after the enactment of the Surplus Fund Act 2020. The fund has helped the government to meet the growing development costs amidst less-than-expected revenue generation. But the collection of surplus funds has been suspended since the 2022 financial year as most of the 61 autonomous, semi-autonomous and statutory government agencies are unwilling to make the contribution. Experts say that surplus funds almost used up may have added to the government's ongoing fund crunch. A court directive of September 2022 that asked the law and finance secretaries to explain the legality of the act appears to have discouraged the authorities from gleaning whatever amount of idle funds that are there.

Whatever the government says, it appears to be facing a serious economic crisis that it must overcome by employing all means that it can. A first step in this direction could be serious effort on part of the government to repatriate the money that has so far been laundered out. A former minister of state for planning on June 20 put the crisis down to illicit financial flows, by way of which $7–8 billion were annually laundered out. It is time the government acted, early and in earnest.​

 

[Bilal9]

Aussie MP seeks review of funding for Bangladesh

An Australian lawmaker on Tuesday urged the country’s government to immediately review its funding arrangements with Bangladesh to ensure...

www.newagebd.net

Aussie MP seeks review of funding for Bangladesh
Staff Correspondent 04 June, 2024, 20:57

View attachment 6286
Abigail Boyd. | Collected photo.

An Australian lawmaker on Tuesday urged the country's government to immediately review its funding arrangements with Bangladesh to ensure they were being used to support the people of Bangladesh and not filling the pockets of corrupt officials.

Abigail Boyd, member of the Legislative Council and Temporary Chair of Committees, came up with the demand in a notice submitted to the Parliament of New South Wales.

Boyd shared a video of her statement made in parliament on her verified Facebook page.

She brought the issue to the house, referring to recent United States sanctions on former Army chief Aziz Ahmed over his involvement in 'significant corruption'.

In her notice, she said that this House notes that, on May 20, 2024, the US Department of State announced the public designation of former General Aziz Ahmed, previously chief of the Bangladesh Army Staff, for significant corruption, including interfering in public processes, assisting his brother to evade accountability for criminal activity, and accepting bribes in exchange for government appointments.

In addition, she asked the parliament to note that there were many reports of corrupt activity being carried out by Bangladeshi officials, with the chair of the Bangladeshi Anti-Corruption Commission stating in November 2020 that corruption and bribery are rampant in government services.

The Greens member also said that corruption in Bangladesh had undermined its democratic institutions and the public's faith in public institutions and processes, and the Bangladeshi authorities had further undermined democratic institutions and processes by rigging elections and violently silencing or arresting over 8,000 members of the opposition party in order to maintain power, subjecting their citizens to arbitrary arrests, intimidation, surveillance, extortion, and torture, and carrying out over 600 enforced disappearances since 2009, of which 100 individuals are still missing.

She also said that the Australian government gave $116.2 million in developmental aid to Bangladesh in the 2023–24 financial year and supported Bangladeshi students as they pursued graduate school in Australia.

To read the rest of the news, please click on the link above.​

This is the joke of the day, $116.2 million "donated" to Bangladesh last year and their newly minted woman MP is all in a big huff about it. Why do we even take their miserable chump change ??

I say let these people keep their measly $100 Million (US$50 Million) if they have such doubt.

In their minds, they are living in their Khayali Pulao dreams from twenty years ago.

Maybe Bangladesh should offer US$50 Million to Australia and then raise corrective questions about their racist politicians.

Not a fan of AL corrupt politicians - but not a fan of idiot Australian politicians either.

 

[Saif]

Public Servants: Anti-graft laws, rules relaxed over the years

For over two decades, laws and regulations meant for curbing corruption by government employees have been relaxed, creating scope for officials to indulge in irregularities with relative impunity.

www.thedailystar.net

Public Servants: Anti-graft laws, rules relaxed over the years

For over two decades, laws and regulations meant for curbing corruption by government employees have been relaxed, creating scope for officials to indulge in irregularities with relative impunity.

Both the BNP and Awami League-led governments made amendments to the rules, lightening penalties for corruption.

Through an amendment to the Government Servants (Discipline and Appeal) Rules (1985), the authorities in 2018 included "reprimand" as a penalty for corruption that has been proven through investigations.

Before this amendment, the punishment was either "compulsory retirement", "removal from service" or "dismissal from service".

Civil service expert Firoz Mia said relaxation of the rules and regulations would have a harmful impact in the long run.

"If an investigation finds that a government employee was involved in corruption, why would the person be in service? Why should other officials work alongside the corrupt individual? What message would the colleagues get?" he asked.

Instead of creating scopes for corrupt officials to evade accountability, the government should make strict corruption-busting rules that uphold transparency, he added.

In April, an investigation found that Promatha Ranjan Ghatak, now an assistant secretary, had embezzled Tk 7.35 crore while he was the land acquisition officer in Madaripur from June 2020 to June 2021 .

On papers, he provided the money to five locals who owned plots of land that were acquired by the state for the Padma Bridge. But in reality, as public administration ministry investigations found, the plots were owned by the government, and there was no need to compensate anyone.

The punishment Promatha received was a demotion from the rank of senior assistant secretary to assistant secretary.

Feroz Mia said the penalty was not commensurate with Promatha's offence.

A joint secretary of the cabinet division, requesting anonymity, said, "Had the 1985 rules not been relaxed, the official would surely be dismissed. As long as he is there, his honest colleagues will feel uncomfortable."

In April, the government reduced the salary of Bir Amir Hamza, an assistant commissioner (land) of Bogura Sadar Upazila, for 12 months after he was found guilty of forgery for financial gains.

The punishment raised eyebrows as many of his superiors thought he would be sacked.

Many believe that the government provided impunity to the public servants by enacting the Government Services Act, 2018, which replaced Public Servants (Dismissal on Conviction) Ordinance, 1985.

According to the 1985 ordinance, a government employee punished for any criminal offence should be dismissed.

As per the 2018 act, an employee can be in service even after being sentenced to up to 12 months in prison for a criminal offence.

The 2002 amendment to the Government Servant (Conduct) Rules-1979 is yet another example.

According to Section-13 of the rules, civil servants had to submit their wealth statement to their departments every year.

But now the employees have to do it every five years, thanks to an amendment to the rules during the tenure of the BNP-led alliance government in 2002.

Many officials do not bother with submitting their wealth statements it at all, sources said.

Besides, the public administration ministry has taken an initiative to further relax this provision. The ministry proposes that the government collect the employees' wealth statements from annual tax returns if necessary.

Former secretary Badiur Rahman said that weakening the law means encouraging corruption.

The lenient rules and laws send a message to the government employees that they can get away with corruption, he said. "These amendments are a step in the wrong direction."

Only stringent laws can deter corruption, he added.

Supreme Court lawyer Arif Khan said, "Enacting laws or regulations that encourage corruption is tantamount to ignoring the Constitution."

The Constitution states that the government will enact laws so that no citizen can possess illegal wealth. According to Article 20(2) of the Constitution, "The State shall endeavour to create conditions in which, as a general principle, persons shall not be able to enjoy unearned incomes..."

Over the last few weeks, corruption by several government officials hogged the headlines.

Awami League leader and lawmaker Mahbubul Alam Hanif on June 25 told parliament that corruption had eclipsed the government's achievements.

"The government has repeatedly announced its zero-tolerance policy against corruption… The rules and regulations have been relaxed and made more lenient. There is scope for errant officers to be on job with the bare minimum penalties."

He said the Government Services Act, 2018, could be "considered a law to protect criminals".

On June 26, lawmaker Kabirul Haque said corruption had become institutionalised.​

 

[Saif]

Costs of high-level corruption: Further down the kleptocratic route

Collusive abuse of power is a major reason why perpetrators of high-level corruption can get away scot-free in Bangladesh.

www.thedailystar.net

Costs of high-level corruption: Further down the kleptocratic route
High-level corruption

VISUAL: SHAIKH SULTANA JAHAN BADHON

Mahatma Gandhi's quote that there is enough in this world to meet everyone's need but not for anyone's greed is aptly illustrated by the ongoing media and other credible exposures of evidence of corruption in Bangladesh. Confirming that sky is the limit, these revelations of high-level abuse of power, known as grand corruption, though nothing new except the procession of disclosures, have shocked and awed the nation.

Several key institutions, apparently sanctuaries of high-level corruption and related criminalities, have been exposed to risks of kleptocratic capture. These include the army, police, Rab, National Board of Revenue (NBR) and, not the least, the country's major political parties. A former army chief and his immediate family have been slapped with sanctions for "significant corruption," including assistance in evasion of accountability for criminal activity, facilitating improper awarding of military contracts, and acceptance of bribes. His actions have been assessed to have "contributed to undermining Bangladesh's democratic institutions and the public faith in public institutions and processes."

Having retired after gaining the dubious distinction of topping the list of kingpins behind sanctions against Rab for gross human rights violations, the former police chief has managed to flee the country with questionable ease, arguably as part of a suspected sinister deal. This at a time when he has been publicised to be under the Anti-Corruption Commission's (ACC) radar for amassing unbelievable amounts of income and wealth acquired across the country by ruthlessly violating entrusted institutional power coupled with political blessing, fraud and criminal extortion. In so doing, he applied the skills acquired over the years as a crime control professional and transformed himself from his mandated position of protector of law to a role model of lawbreaking. As widely expected, he was not the only instance of such brazenly normalised corruption in the police force as many other similar exposures followed, including that of the former Dhaka Metropolitan Police commissioner.

A member of NBR and president of its Customs, Excise and VAT Appellate Tribunal came to the spotlight, catalysed by his son's goat scandal and subsequent exposure of grotesque details of his and his family's accumulation of income and properties. He did so abusing his oversight role of revenue generation for the state, which he converted into that of the tax evasion guru as an illegitimate source of income. It is again obvious that he is not the sole X percent person in the NBR, nor is it possible that he operated in isolation without collusion and protection of many others.

No less troubling is the case of the brutal killing of an MP allegedly as an example of infighting of political power abusers over the share of booties of gold smuggling and the related illicit business facilitated and protected over the years by those mandated to control such criminalisation of politics. Again, this is no isolated case of political corruption, as symbolised by the case of an MP serving prison term in Kuwait for transnational crimes, including money laundering and human trafficking. Nor is criminalisation of politics a monopoly of the current ruling party, as its arch-rival left behind a legacy of no less grand corruption, arms smuggling and ruthless political criminalisation, including several attempts at the life of the top leader of their rival political party, causing multiple deaths.

As scandalous as these examples are, it is no surprise at all because successive regimes have driven the state to this level through their desperate bids to ensure partisan capture of the institutions to facilitate, promote and protect power abuse and thereby grant impunity to high-level perpetrators.

Implications of such grand corruption are destabilising for the state. Their money value can be concretely measured only by the government and relevant agencies, only if done with integrity, free from conflict of interest. For some general idea, one may consider the value of compromise of the least cost, best quality principle in procurements and other public expenditures in which the officials were involved and received kickbacks or shares; value of concealed and laundered income and wealth; undervalued price of acquired properties and taxes evaded, etc.

On the other hand, a close look at the files of clients of NBR officials will take independent investigators to a gold mine of data to explain why Bangladesh's tax-GDP ratio is one of the lowest in the world; why the target of increased pressures for higher revenue collection are the common people through indirect taxes; and why honest taxpayers are most often treated as enemies of unscrupulous NBR officials while tax evaders as close allies. Tax officials' bribery and kickback are more directly damaging for the state than any other sector. Irrespective of the amount a tax official collects to facilitate illicit tax evasion, the evaded tax amount is a direct loss of revenue. Add to this, the unabated problem of money laundering, the lion's share of which takes place through trade-based illicit transfers allegedly with the knowledge, facilitation and collusion of the revenue authority.

Collusive abuse of power in all these cases is also among the reasons why nothing has happened to the perpetrators. The former NBR member, for instance, conveniently outsmarted several initiatives for departmental procedure in response to allegations over the years, nor could the ACC proceed with concrete action. It's also no secret that he has been enjoying the patronage and protection of the business-politics-bureaucracy power structure, which also helped invincibility of the overall illegal tax evasion system.

Non-monetary costs of corruption are no less ominous for the state, the worst victim of which are the institutions in general and particularly those at the centre of recent focus. None of them has yet shown the courage to come up with any action or concrete pledge against those within their own ranks, who have pushed the respective institutions to severe reputational damage. None of them seem to care that it is time to face the mirror and undertake strategies to ensure accountability and justice in the short term, and overhaul themselves in the medium and long terms, which is indispensable to restore their credibility and uphold the spirit and values of Bangladesh's independence.

What has happened instead has only added to the already existing atmosphere of intimidation to the media, as demonstrated by the infamous statement by the BPSA, which has been viewed as nothing but an effort to grossly curtail media freedom guaranteed by the constitution. Aggrieved by the disclosures and with an apparent sense of insecurity as birds of the same feather, the association adopted the "shoot the messenger" tactic and blamed media reports as motivated, while in fact the statement itself was a motivated act to suppress disclosure of corruption information. It is also no coincidence that the home ministry reached out quickly to the information ministry with a note that practically endorsed the BPSA position.

Coming as all these do simultaneously with the creation (once again) of the provision in the national budget for an unconstitutional, discriminatory and corruption-friendly reward system for black money, the key message given to the people is that corruption enjoys systemic guarantee of impunity. Little do the power holders seem to care that by converting the commitment of zero tolerance against corruption in election manifestos and other public pronouncements into useless rhetoric, floodgates are being opened to further kleptocratic disorder of the state.

Dr Iftekharuzzaman is executive director at Transparency International Bangladesh (TIB).​

 

[Saif]

Padma Bridge Project: Corrupt yet let off the hook too easily

A government employee has been reinstated to his job after being dismissed for being involved in a fraudulent compensation scheme in the Padma Bridge project.

www.thedailystar.net

Padma Bridge Project: Corrupt yet let off the hook too easily
Forced into retirement for graft, land surveyor gets his job back with lower salary

Mainul Hasan

A government employee has been reinstated to his job after being dismissed for being involved in a fraudulent compensation scheme in the Padma Bridge project.

Mainul Hasan, a former land surveyor of Madaripur, was sent into forced retirement in November last year after the district administration and land ministry's investigation found him guilty of facilitating a scam, for which the government lost Tk 1.64 crore.

However, land ministry Secretary Khalilur Rahman reinstated him on June 9 this year, reducing his punishment from forced retirement by lowering his salary grade for five years.

Earlier in September 2022, a divisional case was filed against him over misconduct and corruption.

During Mainul's posting in Madaripur deputy commissioner's office in 2020, he was responsible for overseeing land acquisition for the Padma Bridge in Shibchar upazila.

He granted Tk 1.64 crore to two individuals for supposedly using 3.37 acres of their land for the project in Sujanagar mouza.

However, the land never belonged to the two in the first place, in fact, those were government land.

The compensation was provided based on forged documents.

Following allegations against Mainul, a three-member investigation committee was formed, led by the deputy director of local government.

The committee confirmed that Mainul issued compensation cheques on September 9 and September 20 of 2020. The land ministry also formed a separate probe committee.

"Allegations of negligence in the misconduct of duties are found true," the probe body concluded.

On November 8, 2022, the ministry issued a notification stating that Mainul would be forced into retirement for his involvement in corruption.

"This type of dishonest activity harms the interests of the government and tarnishes the image of the office. It shows a lack of honesty, impartiality, responsibility, and efficiency in his work," said the notification. It also stated that Mainul "personally benefited from the scheme".

Mainul's response to a show-cause letter was deemed unsatisfactory, according to the notification. However, on March 11, 2023, Mainul appealed to the land ministry.

After the appeal hearing, led by the secretary, the ministry backtracked from its original decision. Although the committee, which heard the appeal, was convinced that Mainul failed to provide satisfactory response in his defense, the forced retirement was suddenly deemed as "excessive punishment".

On June 9, 2024, a new notification was issued, reducing Mainul's punishment to a lower salary grade for five years.

Many senior government officials at the land ministry were baffled by the decision.

Requesting anonymity, an officer of the ministry, said the reduction in punishment does not set a good precedent for junior officers.

Mainul could not be reached for comments.

Contacted, Transparency International Bangladesh Executive Director Iftekharuzzaman said, "Specific allegations against the accused employee [Mainul] were proven and undeniable. The ministry officials, including the secretary who protected this employee, are guilty of supporting corruption."

Despite repeated attempts through texts and phone, the land secretary could not be contacted for comments.​

 

[Saif]

Black money-holders laugh, loan defaulters to grumble

A 'no pay, no claim' measure is adopted on interest expenses to accelerate repayment of loans as parliament Saturday passed the finance bill with contentious provisions for black-money whitening and duty-free car import. In another major fiscal measure, opposed by many, the government impose

thefinancialexpress.com.bd

Black money-holders laugh, loan defaulters to grumble
DOULOT AKTER MALA
Published :
Jun 29, 2024 23:55
Updated :
Jun 29, 2024 23:55

A 'no pay, no claim' measure is adopted on interest expenses to accelerate repayment of loans as parliament Saturday passed the finance bill with contentious provisions for black-money whitening and duty-free car import.
In another major fiscal measure, opposed by many, the government imposed gains tax on investors in stocks.

From July 1, 2024, taxpayers would be able to claim tax benefit on interest amount as 'allowable expenses' if they pay it (interest amount) in that year.

In the Finance Act 2024, passed Saturday in parliament, the government has scrapped the existing provision to cushion loan defaulters.

Taxpayers will be able to lessen their tax liability by claiming the interest or profit expenses in their tax returns, if it is paid instead of the existing provision 'payable'.

Currently, section 46(7) of the Income Tax Act 2023 allows payable interest or profit expenses of taxpayers to claim tax benefit up to three years, even if it is not paid in this period.

However, if the amount remains unpaid within three years, the entire amount would be treated as taxable in the fourth year as 'special business income'.

Official sources say the loopholes in the law have been addressed in this Act by amending the longstanding provision helping loan defaulters to exploit the leniency for years.

"Only interest actually paid will be considered for tax benefit," says one revenue official.

Executive Director of the Policy Research Institute (PRI) Dr Ahsan H Mansur hails the measure he expects to minimize the country's bloated non-performing loans or NPLs, staying as a dead-weight on the banking system.

"It is justified to allow tax benefit if interest amount is paid, otherwise a loan defaulter would benefit in two ways," he says.

According to Bangladesh Bank (BB) data, default loan in the banking sector had hit an all-time high at Tk 1.82 trillion until March 2024.

However, in view of recurrent lending anomalies, it has been claimed that actual volume of default loans is higher than the official figure.

As per BB data, some 11.10 per cent of the disbursed loans have turned sour as bad loan.

In the new act, the parliament has kept the highest tax rate for individual taxpayers unchanged at 25 per cent for FY 2024-25. In the budget speech on June 6, 2024, the finance minister had proposed to raise the tax rate to 30 per cent.

Dr Mansur says the decision is justified as existing taxpayers should not be penalized only. "The government should find out the tax-evaders and people escaping tax net."

Also, the proposal on imposing 25-percent Customs Duty (CD) on import of vehicles by Members of Parliament (MPs) has not been passed by the parliament.

As a result, the MPs would go on enjoying the duty-free benefit on import of their high-end vehicles.

Also retained are the tax-holiday and zero-duty facilities on import of capital machinery for private Economic Zones and Hi-tech Parks.

Despite strong demands for continuation of tax-free benefit for individual investors in capital market, the parliament endorsed the budget proposal imposing 15-percent capital-gains tax on investment above Tk 5.0 million.

Also, the much-talked-about black money-whitening scheme by paying 15-percent tax for both individual and corporate taxpayers is ratified by the lawmakers.​

 

[Saif]

Two companies of S Alam Group evade Tk 3,538 crore in VAT

Two companies of S Alam Group evaded Tk 3,538 crore in Value Added Tax through various ways in three years between 2019 and 2022....

www.newagebd.net

Two companies of S Alam Group evade Tk 3,538 crore in VAT
Staff Correspondent 30 June, 2024, 23:58

Two companies of S Alam Group evaded Tk 3,538 crore in Value Added Tax through various ways in three years between 2019 and 2022.

The two companies----Vegetable Oil Ltd and S Alam Super Edible Oil Ltd--- evaded Tk 3,538 crore in VAT and they were also fined another TK 3,531 crore for evading the VAT amount.

The National Board of Revenue found the incident during an audit by the NBR's VAT wing of Customs Excise & VAT Commissionerate, Chattogram.

Of the amount, S Alam Vegetable Oil Ltd evaded Tk 1,917 crore and S Alam Super Edible Oil Ltd evaded Tk 1,621 crore between FY 2019-20 and FY 2021-22, according to the audit report.

Syed Mushfequr Rahman, commissioner of Customs Excise & VAT Commissionerate, Chattogram, told New Age that the companies had 90 days' time to appeal in this regard.

'Now the issue is out of our hand and only the tribunal will take decision after their appeal within the stipulated time,' he added.

The NBR official also said that the companies had denied the results now, but 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.

S Alam Group's company lawyer Mustafizur Rahman, however, told media that the VAT auditors had legal obligations to inspect the factory to assess the sales records and hear them, but they reached the decision without doing any of these.

He also said that they were not given the opportunity to be heard.​

 

[Saif]

HC questions govt demands of unpaid VAT from S Alam companies

The High Court today questioned the legality of government's demand for unpaid VAT and the consequent fines of over Tk 7,000 crore from S Alam Vegetable Oil Ltd and S Alam Super Edible Oil Ltd

www.thedailystar.net

HC questions govt demands of unpaid VAT from S Alam companies
S Alam Group assets

The High Court today questioned the legality of government's demand for unpaid VAT and the consequent fines of over Tk 7,000 crore from S Alam Vegetable Oil Ltd and S Alam Super Edible Oil Ltd.

On June 9, the Customs, VAT & Excise Commissionerate, Chattogram, in its adjudication orders asked the two companies to pay Tk 3,538 crore in "evaded VAT", Tk 3,531 crore in fines, and interest on the amounts, to the state coffers within 15 work days. Customs said the value added tax was evaded in fiscal years 2019-20 and 2021-22.

Today, the HC in two rules asked the respondents as to why the VAT determination orders -- issued by the commissioner of Customs, Excise & VAT Commissionerate, Chattogram, without hearing the two companies -- should not be declared illegal.

The respondents – the commissioner and deputy commissioners of the Chattogram commissionerate; and revenue officer of Customs, Excise & VAT, Karnaphuli Circle, Taltola Chowki, Patia, Chattogram -- were asked to come up with an explanation within 10 days.

The court also asked them why the commissioner of the Chattogram commissionerate should not be asked to dispose of the matter by strictly following sections 73 and 85 of the Value Added Tax and Supplementary Duty Act, 2012.

The HC bench of Justice Zafar Ahmed and Justice Sardar Md Rashed Jahangir issued the rules after two writ petitions were filed by the two companies.

The bench also fixed July 15 to hold a hearing on the rules.

During today's hearing, the companies' lawyer Ahsanul Karim told the bench that his clients on June 4 sought time from the commissionerate for their senior counsel to appear for hearings.

He said his clients were not heard before the adjudication orders were issued. The commissioner of the Chattogram commissionerate violated the principle of natural justice in passing the orders by not allowing his clients to defend themselves against allegations made in show-cause notices issued on October 4 and December 27 last year and on March 18 this year, the lawyer said.

Deputy Attorney General Nawroz MR Chowdhury representing the government told the court that the companies were given time on several occasions over the last one year to submit their statements before the commissioner to uphold the principle of natural justice.

But they had not done it. They cannot be given unlimited time under the relevant law, he said.

At one stage, Deputy Attorney General Samarebdranath Biswas told the HC that the companies' intention was not to pay the VAT.

Lawyer for the companies, Ahsanul said his clients never said that they would not pay the VAT.

According to an audit by the VAT wing of the National Board of Revenue, the companies have unpaid VAT and consequent penalties of over Tk 7,000 crore. They evaded VAT by presenting lower purchase and sales data in VAT returns and other means between 2019 and 2022.

The audit was subsequently reviewed by a five-member committee led by an additional commissioner of Chattogram VAT Commissionerate, which also arrived at the same conclusion.

The two companies denied any wrongdoing.​

 

[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...

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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.​