• Tuesday, Nov 13, 2018
  • Last Update : 01:44 am

In need of reform

  • Published at 03:15 am June 29th, 2018
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Photo: BIGSTOCK

A necessary step forward would be introducing automation into the process

Our tax system is in a state of disrepair.

A system that is all too reliant on collecting from limited sectors -- depending too much on value added tax and individual tax in the process -- has led our country to having the highest tax-to-GDP ratio in the Asia-Pacific region .

According to NBR data, as of June 2018, there are about 3.5 million tax identification number holders, of which about 1.95 million submit tax returns.

As things stand, the current administration has failed miserably in widening the tax net to include more income tax-payers, despite individuals having more disposable income now than any other point in our nation’s history.

One of the key reasons behind the lack of income tax is people’s justifiably negative attitude towards the process. Mired in unnecessary levels of red tape, bureaucracy, and the ubiquitous corruption that is rampant in our government services, it is only natural for people to view the tax system as nothing short of systematic abuse of their hard-earned money.

It should go without saying: Our tax system needs comprehensive reform.

A necessary step forward would be introducing automation into the process -- by removing the more undesirable human elements from the system, we also stand to lose much of the bureaucracy and corruption associated with paying taxes.

In failing to modernize our tax system, the government is leaving money on the table, and, in the process, affecting other facets of our national revenue.

Bangladesh’s economy is moving forward at a tremendous pace, and it is important that we have a modern and efficient tax system to keep up.