In Bangladesh, all tax-paying citizens know that our current revenue collection systems are outmoded to the point where it actively deters from the very notion of paying taxes, leading to a tax net that has been static, if not shrinking year after year.
Coupled with the rampant corruption that is so endemic to this sector, it's clear that the slow erosion of trust in our tax collection mechanisms is entirely justified.
However, the recent approval of the Draft Income Tax Act 2023 gives us all some reason to be hopeful, as some of the more especially noticeable points in the draft include provisions such as the income tax being determined according to the formula prescribed by law and not the whims of the tax officer.
To outsiders, to require legal amendment to combat such obviously problematic behaviour from a government agent might sound absurd, but that is indeed the status quo within which our tax laws have lingered for far too long. But that is indeed all the more reason why this sector needs sweeping reforms.
Bangladesh has found it increasingly difficult to widen the tax net and improve our revenue collection, to the point where our nation has one of the lowest tax-to-GDP ratios in the entirety of the sub-continent.
Given the critical point Bangladesh is at in its economic trajectory, a widening tax net will play a very important part in furthering our ambitions of becoming a middle income nation within the coming years.
What we need is radical change in our tax culture, a good start would be rooting out the corruption that is endemic to the system as it exists, by increasing transparency into how our hard-earned income is being spent by the state, and of course by fostering faith in the government to do what is necessary.