Poor tax-GDP ratio due to failure to use revenues for public services
FE Online Report | Thursday, 17 December 2015
Failure to use tax revenues for public services, unfair enforcement and widespread corruption have been identified in a study as the main factors for the country’s prevailing poor tax-GDP ratio.
Besides, tax exemptions and evasions in general are also responsible for low revenue mobilisation, which has made Bangladesh a low-tax country, said the study released Tuesday.
It said the concept of fair taxation hasn’t been ensured yet mainly in the absence of globally recognised norms of implementation policies and transparency and accountability based on participatory approach.
Sushasoner Jonny Procharavizan (SUPRO) released the research findings titled ‘Fair Tax Monitor Bangladesh’ at AS Mahmud Seminar Hall of the Daily Star Building in the capital. The report was also launched in three other countries – Pakistan, Senegal and Uganda.
Chairperson of SUPRO Ahmed Swapan Mahmud moderated the event.
Stressing the importance to reform the country’s decades-old revenue system, the discussants at the report launching ceremony said greater political leadership and commitment are required to overcome the prevailing challenges as vested interest groups have strong resistance to reforms.
Revealing the report, SUPRO Director Alison Subrata Baroi said they made the study in line with three other countries with the objectives to identify main bottlenecks in tax systems and provide strong evidence-based support to country-level advocacy work.
He said share of personal income tax (PIT) in the total revenue collection has steadily increased over the years but collection is still below the potential considering the size of eligible taxpayers in the country.
Citing a report of the National Revenue Board (NBR), he said only less than 1.0 per cent of taxpayers own assets worth over Tk 20 million, which is unrealistic and unbelievable.
“The actual value of the assets has not been properly assessed and there must be extensive reforms to determine the true value of property,” he said.
Cleared by Nilufer