It is encouraging to see the national board of revenue (NBR) taking stock of things and intensifying measures when it comes to tax surveys, inspection, monitoring, and other relevant actions.
Bangladesh has one of the lowest tax-to-GDP ratios in the South Asian region, and the fact that authorities have taken notice and are actively working on fixing this problem is a good start.
As part of intensifying tax survey information, flat and home-owners in areas such as Gulshan and Banani would be monitored. Anyone who is eligible for paying taxes but is not enlisted in the NBR database will be given an electronic tax identification number, and it will be mandatory for them to pay taxes from this year.
Street surveyors would be put on high alert as well to find out potential tax payers and monitor those who are failing to meet their state-sanctioned duties or are on the path to committing tax fraud.
While these initiatives are promising, the fact still remains that our tax collection is in a sorry state. According to the April 2021 issue of the World Economic Outlook, the tax-to-GDP ratio has been at 9.9% since 2016-2020. This falls far short of the ratio that is ideal for developing countries. As Bangladesh drives towards that vision and undertakes a huge number of development projects, the importance of tax in the national budget will become more important.
The new initiatives are acceptable, but as long as we have measures that run counter to our objective like official offers of turning black money white through the investment in certain projects, we will always be far from our goal.
The initiatives proposed by the NBR are to be encouraged, but they have to be properly implemented and efforts such as the project to transmute black money needs to be cut. Bangladesh has strong ambitions, and taxes is one area where the country has always suffered.
Let’s make sure that ceases to be the case.