Bangladesh has historically had a problem when it comes to tax collection. While the recent report of a 17% growth in the collection of value added tax (VAT) during the FY23 period is indeed good news, relying on indirect sources of tax such as VAT is unsustainable in the medium-to-long term.
Truth is that, unless the government takes pro-active measures to widen our tax net by encouraging the public at large to pay their taxes, our economy will perennially be two steps behind in fulfilling its potential. The best way for the government to ensure that people pay their taxes is by first introducing some much needed transparency in how our hard-earned money is being spent by them, and then dispelling the culture of corruption and trepidation surrounding taxes in general.
It is extremely unfortunate that a backward culture where paying taxes is not only an extremely cumbersome process, but honest, diligent tax-payers are continuously harassed -- while those who evade taxes with little to no regard are allowed to get away without repercussion -- still prevails. What reason does a citizen have to pay their taxes when they have no clue if that money is being well spent, or even misappropriated by corrupt bureaucrats?
Needless to say, the entirety of our tax culture needs to be fixed. It needs to be made more pro-people.
Relying on indirect taxes as a means to prop up our narrow tax net is simply furthering the already wide income inequality, as it places an inordinate amount of the burden on lower income groups.
In order to get people to pay their taxes, they need to have faith that the system itself works for the betterment of the country. That faith needs to be restored.