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Income tax is vital for development of the economy

November 08, 2018 00:00:00


Revenue fuels growth and development of any economy. As a result, taxes - especially income tax - are an important source of revenue that helps any economy grow. This narrative is no different for Bangladesh. Every year, the government collects a vast sum of revenue, and fortunately this amount is increasing with every passing year.

Over the last few fiscal years, the government has been setting bigger targets. Its aim is to attain greater economic growth through bigger size of national revenue.

In the ongoing fiscal year of 2018-2019, the government has set a target to achieve national revenue of Tk 2,910 billion. From this total, the revenue collection target from Value Added Tax (VAT) is Tk 1,100 billion. The target for income tax is Tk 980 billion and from customs Tk 830 billion.

In last fiscal year of 2017-2018, the National Board of Revenue (NBR) had a target of Tk 2,481.9 billion. Later, this target was trimmed down to Tk 2,230 billion in the revised budget.

The target of national revenue is growing with every passing year as amount of revenue from income tax, VAT and customs have been on the rise. The focus on income tax has also been on the rise in every consecutive budget. The government has emphasised that the NBR brings in new taxpayers under the tax net every year. Currently, the number of electronic tax identification number (eTIN) holders in the country stands at 3,460,000. The tax-GDP ratio is just over 10 per cent.

While the number of taxpayers and the amount of income tax being paid is growing, it is not increasing at the rate that it can.

Recent private and public organisation statistics have revealed that nearly eight million people have the ability to pay income tax every year to the government. But they are yet to become taxpayers due to various reasons like unawareness, fear, different financial difficulties, corruption and more. Fortunately, the number of hindrances to tax payment is gradually decreasing.

The process of paying taxes will become more convenient soon. The NBR Chairman has recently said that the government will soon launch a paperless process. From November 13, 2018, income tax fairs will be held in Dhaka and other parts of the country.

As concerned and conscious citizens of the country, everyone should pay their income tax. There is no alternative to income tax payment for the development of the country. Also, the government needs to ensure that corruption is eradicated from the sector so that income taxes are paid properly and these add to the government's exchequer.

Md. Mahbubur Rahman Sazid

Student, University of Dhaka

[email protected]


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