Whitening black money

It is almost as if the ordinance was designed to whiten black money, the proceeds of corruption, that was invested in the stock market. Promulgated on Wednesday, it provided that the source of any investment in stocks would not be questioned, provided it remained invested for 120 days, from 24 April, the commencing day of the ordinance, to 30 June 2014. Even prior to the promulgation of the ordinance, the immunity can be availed provided the investment is for 45 days till 30 June. The ordinance comes at a peculiar time, just a month before the federal budget’s announcement, and it will be made part of the Finance Act that will be presented them. If not presented, it will still be valid until August 24, the normal four-month period of an ordinance. It is almost as if there was someone who had a mass of black money, planned to put them into stocks, and then take them out, and thus get the money, now whitened. The ordinance contains a number of other measures related to the stock market, notably to the capital gains tax and the introduction of a capital value tax of 0.01 percent, not adjustable and a final liability.

It is not just the timing which is awkward, but also the fact that this comes at a time when the government is facing a huge number of corruption accusations. It is to be assumed that this corruption has resulted in large amounts of anonymous cash, which the corrupt at the moment particularly need, what with elections due early next year and campaign funding urgently required. If the government had wanted to show off that its members were guilty of corruption, only a bald statement would have been a blunter statement.

If the government wishes to avoid the charge of providing avenues for whitening the proceeds of corruption, it should repeal this ordinance forthwith, and certainly not include it in the coming Budget. The stock market is not in such desperate straits that it needs black money as a lifeline. That excuse must not be made to justify a measure that only encourages corruption at a time when the realization is spreading that corruption is ultimately paid for by the taxpayer. The government has a record of pandering to special interests, but it should not pander to criminals, and must not help them hang on to their ill-gotten gains, or to make legal what is illegal. That would be to add the insult of being trampled by those who have got hold of money to the original injury of these crooks having profited from corruption.