img 1Campaign for Good Governance-SUPRO has organized a National Consultation on the findings of Baseline Survey on Tax, Tax Gap Analysis and Tax System in Bangladesh in cooperation with ‘Oxfam’ on March 31, 2014 at The Daily Star Center.
Member of NBR, Kalipada Haldar was the chief guest where Conor Molly, ACD-In Charge of Oxfam Novib and Farah Kabir, Country Director of ActionAid Bangladesh were present at the seminar as guest speakers. The seminar was presided over by Chairperson of SUPRO Mustafizur Rahman Khan and moderated by GS of SUPRO Md. Arifur Rahman while Rubbayat Hashmi , a Researcher presented the findings of baseline survey.

The Report says in recent years, the Government of Bangladesh has initiated several administrative and policy reforms in the tax system. Bangladesh is gradually improving to increase the tax-GDP ratio over the years (9.98% in 2011). The performance is still unsatisfactory as compared to other countries at a similar stage of economic development in terms of tax-GDP ratio. Economists often argue that the tax- GDP ratio should be 20% for sound management of public sector and economic development and Bangladesh is well far from that.  In Bangladesh, the collection of tax revenue mainly depends on indirect tax sources rather than direct taxes (direct tax 25.05% and indirect tax 57.57 in 2011-12) where VAT is important source that directly and indirectly affecting poor and general people as well.

img 2img 3Speakers at the seminar said that though several policy reforms have been undertaken to increase the tax- GDP ratio, the participation of the people in policy reform process from all spheres of the society was inadequate to a large extent. To be specific, the voice from grassroots level has never been considered with much importance to reformulate the tax system of Bangladesh. Moreover, it also requires greater understanding of citizens’ perception and opinion about tax, tax system and tax justice. There is a need of baseline information and analysis on different issue of tax to undertake future policy interventions.

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Few recommendations:

  • Government should increase the direct tax base. But because of complex tax system and harassment and out of fear many direct tax payers might not be willing to pay properly. To solve this issue the tax automation can be increased.
  • To make a pro-poor tax policy and fair tax system where direct tax would be get the first preference than the indirect tax.
  • Even though indirect tax is a major source of tax revenue, cases where poor people are affected more like necessary goods, in those cases VAT burden might be decreased. Like, instead of a uniform 15% VAT for all consumer goods some of the necessary goods VAT might be reduced.
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