Bangladesh’s tax-to-GDP ratio falls to 6.6%, says NBR chairman
Debt servicing has become a serious burden, he says at CPD dialogue
The ratio of tax-to-gross domestic product in Bangladesh has declined further, dropping to 6.6 percent this year from 7.4 percent last year, said the chairman of the National Board of Revenue (NBR), Md Abdur Rahman Khan.
"Our revenue challenges are mounting. Debt servicing has become a serious burden, yet our tax-to-GDP ratio continues to fall," he said.
Khan made the remarks today at a dialogue on reforms in corporate tax and VAT at the Lakeshore Hotel in Dhaka, organised by the Centre for Policy Dialogue (CPD).
For all latest news, follow The Daily Star's Google News channel. "We have given excessive exemptions, both to local and foreign investors, which has undermined revenue growth," the NBR chairman said.
Normally, a seven-year tax holiday is acceptable if industries start contributing from the eighth year since their inception, he said.
"But in Bangladesh, exemptions are repeatedly extended, creating a culture of non-payment," Khan said.
He also pointed to a widespread public perception: taxpayers often ask, "What do I get in return for paying tax?" While taxation is a civic duty, trust erodes if people see their money wasted on projects that bring no public benefit and serve only contractors or officials.
"Unless expenditure is prioritised for high-return, essential projects, tax morale will remain low," he added.
Khondaker Golam Moazzem, research director at the CPD, moderated the event.