The figure is too insignificant compared even to the most conservative estimate that puts the current total of black money at Tk 50,000 to 60,000 crore, which Bangladesh Economic Association figures is no less than Tk 175,000 crore.

The trend, according to bankers and revenue officials, indicates a stubborn reluctance on the part of black money makers and owners to go legal.

This is most evident, they say, from the fact that in 30 months to June last, the total amount of fixed deposits -- a common destination of black money -- grew by Tk 14,735 crore to Tk 43,612 crore from Tk 28,877 crore in December 2001, according to Bangladesh Bank (BB) statistics.

The National Board of Revenue (NBR) found in its monitoring that in the three years to June 2004, about 11,500 individuals and companies took advantage of the five types of opportunities the government offers for whitening black money.

"Of them, 2,000 are companies and the rest individuals," says an NBR source, adding only Tk 1,800 crore has become white using the opportunities.

He says, "The opportunities will continue till June next. So, we expect some more people will take advantage of them."

The board will soon send a proposal to the government seeking its decision on whether to continue the opportunities in the next fiscal year or not.

But, bankers and economists say instead of offering the black money makers with scopes to whiten their wealth, all avenues to make black money should be closed, as it affects the poor the most.

Besides, black money making is aggravating the inflation as well as the poor revenue earning of the government and thus affecting the overall growth of the nation.

BLACK MONEY DYNAMICS
Former deputy governor of the central bank and Pubali Bank Managing Director Khandker Ibrahim Khaled notes, "Bribery, corruption, smuggling and manipulations in import are generating the black money. Some portions of it are transferred abroad and some kept as fixed deposits in the banks."

"A particular advantage of keeping money in fixed bank deposits is that they require no photograph of the depositor or any other process required in other types of banking," Khaled says drawing notice to the BB statistics on fixed deposits.

However, Bangladesh Institute of Development Studies (BIDS) Research Director Zaid Bakht does not fully agree that fixed deposits show the real picture of black money. "The larger chunk of black money is transferred abroad and only a little goes into the fixed deposits, while the black money owners spend the rest on posh living," he says.

But, both Khaled and Bakht agree that there is no exact way to reckon how much black money exists in the economy. They put it conservatively at around Tk 50,000 crore to Tk 60,000 core -- or one-fifth of the GDP.

On the other hand, the annual conference of Bangladesh Economic Association (BEA) last year put this figure at around Tk 175,000 crore or half of the GDP.

"Black money makes no positive contribution to the economy," notes Dr Bakht. "It plays no positive role in employment generation, production or any other sector. On the contrary, it has a severe impact on inflation that affects the poor. The unlimited expenditure of black money owners also leads to higher import and increase in commodity prices."

"No matter how many opportunities the government offers to them," Bakht says, "such ill-earned income will never come into the formal economy. On the other hand, when black-money owners are given such incentives, honest tax payers are undermined and discouraged."

In his opinion, "The government must take tough steps to stop tender manipulation, over- and under-invoicing in import, and bribery and corruption in the administration, besides improving the governance, so that the ways to make black money are closed."

MEASURES AGAINST BLACK MONEY
NBR and BB officials say their organisations have taken multiple steps in their lines to seal the sources of black money.

An NBR staff says, "We have opened a central intelligence cell at the NBR to detect major tax evasions and seal leakage in the tax administration. We are also auditing some selected major taxpayers and have some more plans in the pipeline."

A BB official adds, "We have formed an anti-money laundering department under the Money Laundering Prevention Act. This department is working hard to bring all sorts of money laundering to task."

But both the officials admit that the only real way to stop black money generation is a strong political will.

For instance, the government has been going slow over forming a high-powered financial intelligence unit and a strike force to check crimes in the financial sector since the recommendations were tabled back in 2002. Finance Minister M Saifur Rahman told the parliament in February that the issues were still under scrutiny.

Currently there are five ways to whiten black money.

One of them, outlined in the Income Tax Law, stipulates that no tax will be sought and no question asked about the source of money if an individual, firm, association or private company invests in the service or the manufacturing sector. This provision was put into effect in July 2002 and will expire in June next year.

The authorities concerned will also not impose any tax on or inquire about the source of money if an individual buys shares of a company listed with a stock exchange and does not sell them for two years. Similar facilities are offered in investment in housing and purchase of cars.

Earlier, from 1997 to 1999, a similar system encouraged black money holders to whiten their cash. That time about Tk 1,000 crore was whitened and the NBR collected Tk 100 crore in taxes on that.