The statements made recently by our finance minister about how Bangladesh hopes to bring 1% of the population under the tax umbrella by the 2015 FY, is an indication of how the entire tax system in the nation requires an overhaul.
In a nation of 160m, it is quite worrisome to see that the government "hopes" to bring 1.6m taxpayers under the tax bracket over the next couple of years.
We have heard claims that people are unwilling to pay their taxes, but think it is far more likely that the complicated tax system, along with inefficient and non-inclusive collection practices are more to blame for weak tax revenue.
The government would do well to make the tax system more accessible. While we do not necessarily oppose increasing taxes on high-income earners, the tax bracket must be expanded to those who are able to pay.
The bureaucracy involved in paying one's taxes acts as a huge barrier to a large number of people.
A simple solution would be to simplify the tax code and set up a system where one does not need an expert to calculate taxes. Additionally, the kind of initiatives being taken should also seek to bring Bangladesh's informal economy into the fold.
The government would do well to understand that paying taxes also encourages people to participate in the nation-building process. People who pay taxes feel that they have a stake in how their money is spent.
The digital system that was recently launched is a good starting point, but if the predicted outcome is so small – it is clearly not enough.
