Govt banks on tax reforms to lift tax-to-GDP ratio to 10% in five years: PM
Munshiganj-1 MP Md Abdullah had asked about plans to address Bangladesh’s tax-to-GDP ratio, which currently stands between 7.3% and 8%, significantly lower than 23.1% of Nepal, which is a smaller economy.
Prime Minister Tarique Rahman has outlined a series of government plans in parliament to increase the country's tax-to-GDP ratio, including effective legal action against tax evasion, aiming to raise the ratio to 10% within five years and 15% by 2035.
The prime minister, who is in Moulvibazar on a visit, shared the plans in a written answer that was tabled in parliament today (17 June) as a response to a question from Munshiganj-1 MP Md Abdullah.
Abdullah had asked about plans to address Bangladesh's tax-to-GDP ratio, which currently stands between 7.3% and 8%, significantly lower than 23.1% of Nepal, which is a smaller economy.
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In his reply, Tarique said the government has adopted various measures to increase the ratio, including the National Board of Revenue's Medium and Long-Term Revenue Strategy (MLTRS).
He said end-to-end digitalisation of the revenue division is underway, along with expansion of online tax deduction management, reduction of unnecessary tax exemptions and holidays, and simplification of tax laws.
The government is also analysing information from various institutions to determine tax risks, strengthening risk-based audits and investigations using sector-specific average indicators, and enriching the taxpayer database, he said.
He added that the government has introduced AI-based online services for taxpayers and awareness programmes to ensure compliance with tax laws, while also taking effective legal action against tax evasion.
The prime minister also mentioned the formulation and implementation of the Tax Expenditure Policy and Management Framework 2026 to minimise tax expenditures.
The government is strengthening revenue collection from post-clearance audits, pending cases, auctions, bank guarantee encashment, unsettled bills, and deferred payments, he added.
The National Tariff Policy 2023 is being implemented in phases, along with the Customs Strategic Plan 2024-2028.
"I hope implementing these plans will make it possible to raise the tax-GDP ratio to 10% within five years," the prime minister said in his written reply. "Additionally, various initiatives have been taken to achieve the target of 15% by 2035, including the implementation of the Strengthening Domestic Revenue Mobilisation Project and rationalising tax exemptions."
