Following the shift to a new base year for GDP calculations, Bangladesh's tax-to-GDP ratio has further dropped to 7.7%, most likely the lowest among all South Asian nations.
Dr Ahsan H Mansur, executive director of the Policy Research Institute (PRI), says the tax to GDP ratio in Bangladesh should be 18-20%, but it is still stuck at 7.7%, and it won’t grow much this year either.
This forces the government to look to other sources or loans to fund development goals, economist further said.
Explaining why NBR keeps failing to meet its revenue targets so often, and hence the low tax to GDP ratio, Mansur said this is because of two reasons — one is an ancient law and infrastructure worsened by the lack of digitisation.
Another is setting unrealistic goals for the revenue board, he added.