Reframing economic governance: from tax collection to wealth creation

Economic growth cannot be sustained merely through increasing taxes, tightening regulations, or expanding compliance requirements. True and sustainable national prosperity is created when entrepreneurs, businesses, industries, and productive sectors are enabled to grow, innovate, employ people, generate exports, and create taxable wealth.
In many developing economies, including Bangladesh, there is an increasing perception among entrepreneurs that businesses are being treated primarily as sources of revenue extraction rather than as strategic engines of national development.
Regulators, tax authorities, banks, auditors, and professional institutions often focus heavily on tax collection, penalties, documentation, compliance enforcement, regulatory reporting, audit formalities, and interest income generation. However, this insight does not aim to oppose taxation, regulation, auditing, or financial oversight. Rather, it seeks to reposition these functions into a growth-supportive framework where all stakeholders contribute towards national wealth creation before wealth extraction.
It should be kept in mind that an economy grows through the expansion of productive activities. Governments alone do not independently generate taxable income. Tax revenue ultimately originates from business activity, industrial production, trade, services, employment, investment, and entrepreneurship. Therefore, the principal objective of economic policy should be "how to create more taxpayers through growth," rather than merely "how to collect more tax from existing taxpayers."
In reality, when business is burdened by excessive financing costs, regulatory complexities, multiple compliance layers, unpredictable policies, harassment, weak infrastructure, delayed approvals, aggressive tax enforcement, economic expansion slows down. As a result, employment falls, consumption weakens, investment declines, bank defaults increase and eventually government revenue shrinks.
In this context, only effective economic governance can facilitate a transition from a 'collection-centric model' to a 'growth-centric model.
To strengthen our economic sector, foremost priority should be given to our entrepreneurs. Entrepreneurs are the wheel of economic development, as they take risk, invest capital, create employment, generate exports, build industries, pay taxes, support the banking systems, and drive innovation.
Yet, in practice, many entrepreneurs feel that institutions such as tax authorities, banks, utility providers, regulators, auditors, compliance agencies, and licensing authorities are primarily focused on extracting money from them. A nation cannot achieve sustainable prosperity if entrepreneurs are viewed merely as tax-paying entities rather than strategic national assets.
Right after the entrepreneurs, we need to shed light on the role of regulators. Their role is indispensable in ensuring financial stability, market discipline, consumer protection, transparency, and fair competition. However, regulation should support economic expansion, not unintentionally suppress it.
In many cases, however, regulators tend to emphasise control, punishment, excessive compliance, restrictions, and short-term revenue collection, while paying comparatively less attention to business facilitation, economic expansion, investment confidence, industrial growth, and employment generation.
In today's world, the role and philosophy of a modern regulator should evolve into that of a progressive facilitator, risk manager, economic enabler, stability provider, and growth partner. The ultimate objective should be to enhance the nation's productive capacity.
Then comes the banking sector. Undoubtedly, banks play a critical role in economic growth by channeling savings into productive investment. However lending rates often remain excessively high, risk pricing becomes unrealistic, collateral requirements are impractical, SMEs lack adequate access to finance, and restructuring support remains limited.
As a result, productive businesses suffer significantly. In many cases, banks continue to generate profits through high spreads, senior management receives substantial compensation, while entrepreneurs bear the full operational and market risk.
Consequently, the business sector weakens, leading to higher NPLs, lower investment, reduce employment, and ultimately, instability within the banking sector itself. Based on this context, it is high time to reform the banking sector by strengthening support for SME financing, long-term industrial funding, startup ecosystems, export-oriented sectors, technology investment, and agricultural modernisation.
In reframing economic governance, the roles of accountants and auditors are also inevitable. Through transparency, accountability, governance, financial discipline, and investor confidence, they can play a pivotal role in restoring good governance in the economic sector.
Nevertheless, the question still remains: are accounting and audit systems sufficiently contributing to economic growth and business sustainability?
Several challenges still persist in this field, as many businesses perceive accounting and auditing as compliance-heavy, tax-focused, documentation-oriented, and backward-looking rather than strategic. Furthermore, some audited accounts prove to be materially inaccurate, early warning systems often fail, audit quality varies, and business advisory roles remain underdeveloped.
To overcome these challenges, a modern accounting system must evolve beyond traditional bookkeeping and tax compliance roles. Accountants should become strategic financial planners, business advisors, risk analysts, productivity consultants, sustainability partners, and facilitators of corporate governance. Their effective contribution can support business survival, financial restructuring, efficiency improvement, investment planning, and national productivity enhancement.
The same principle also applies to auditing, as auditing should not become merely a procedural exercise. The true value of auditing lies in enhancing trust, improving governance, detecting risk early, strengthening sustainability and protecting stakeholders. However, if auditors fail to identify major risks, becomes excessively checklist-driven, discourage entrepreneurial flexibility, and adds cost without strategic value, then their contribution to economic growth becomes questionable.
Therefore, auditing should increasingly incorporate with sustainability assessment, business continuity evaluation, operational efficiency review, government quality measurement, and forward-looking risk analysis.
Tax policy also should be designed with careful consideration, as an effective tax system encourages investment, rewards compliance, supports business expansion, widens the tax base, promotes formalisation, and increases long-term revenue generation. In this regard, policymakers should recognise that sustainable tax revenue can only be achieved through higher economic activity.
It should also be remembered that aggressive taxation without growth may shrink business activity, encourage informality, discourage investment, and reduce competitiveness.
Therefore, the government should remain focus on ensuring a business-supportive tax policy framework. In this context, the government may consider measures such as lower taxes on productive reinvestment, startup tax incentives, export-oriented incentives, SME-friendly tax frameworks, simplified compliance systems, stable long-term tax policies, reduced harassment and discretionary enforcement, and technology-based transparent assessment mechanisms to ensure a smoother and more efficient tax environment. Moreover, the primary objective should be to grow the economy first, as sustainable tax revenue naturally follows economic expansion.
Besides, economic development requires strong collaboration among the government, regulators, banks, accountants, auditors, investors, entrepreneurs, and workers, because no single group can create prosperity alone. A country progresses when regulators facilitate, banks finance responsibly, accountants provide strategic guidance, auditors strengthen governance, entrepreneurs invest confidently, and governments ensure policy stability. To achieve these, all stakeholders must align towards one national objective: sustainable wealth creation.
What the economy requires today is a strategic and coordinated reform agenda that redefines the role of regulation, banking, taxation, auditing, and entrepreneurship in national development.
Regulatory systems must move away from an enforcement-centric mindset towards a facilitation centric approach. Excessive compliance requirements, bureaucratic rigidity, and unpredictable regulatory interventions often discourage investment and suppress productive economic activity. Introducing business impact assessments before major regulations and reducing unnecessary compliance burdens can create a more supportive and investment-friendly environment.
Likewise, banking sector reforms should focus on enabling productive financing rather than merely protecting short-term institutional interests. Lowering the cost of capital, expanding SME and startup access to credit, and encouraging long-term financing are essential to accelerating sustainable economic growth.
The accounting and auditing professions must also evolve beyond conventional compliance functions. Accountants should increasingly serve as strategic advisors to business, while auditors should strengthen governance through higher audit quality, greater independence, and forward-looking risk evaluation. Value-added audit practice can play a significant role in enhancing transparency, sustainability, and investor confidence.
Tax policy, too requires a fundamental shift in philosophy. Policies that incentivise reinvestment, industrial growth can ultimately broaden the tax base, simplify compliance systems and promote broader tax participation through economic expansion.
At the same time, a vibrant entrepreneurial ecosystem must be treated as a national economic priority. Reducing barriers to entry, supporting innovation and startups, and ensuring policy predictability can ensure the reformation entrepreneurial ecosystem.
Basically, no nation can tax itself into prosperity. National wealth must first be created before it can be distributed or taxed.
Entrepreneurs, productive businesses, and industries are not merely revenue sources-they are the engines of national growth. However, regulators must facilitate, banks must support productive investment, accountants must become strategic advisors, auditors must enhance sustainability, governments must prioritise growth-oriented policies.
A strong economy is built not through excessive extraction, but through enabling productive capacity, innovation, investment, and confidence.
The ultimate objective of all economic governance should be: creating more sustainable businesses, more employment, more productivity, and ultimately more national prosperity."

Md. Fazlur Rahman, business and financial analyst