The recent announcement of the number of taxpayer identification number (TIN) holders crossing 10.2 million is certainly good news when you consider that revenue collection has historically been a thorn in our economy’s side, especially when discussing our narrow and quite stagnant tax net.
Yes, we should be celebrating any and all progress when it comes to widening our tax net, but are 10.2 million tax-payers enough for Bangladesh to fulfill its near-term economic ambitions?
As things stand, our revenue collection still has far too many deficiencies at a cultural level -- from unequal tax brackets, over-reliance on indirect taxes such as VAT, and loopholes which allow the wealthy to dodge taxes altogether, there is a lot of work to be done. Relying too much on indirect taxes has especially been a sore spot for us as they place far too much pressure on the underclass and even more so on the ultra poor.
While there are no silver bullet solutions for Bangladesh to fix its tax issues, the biggest factor that keeps people from paying their taxes is a lack of trust whether we are talking about the overall idea of paying taxes, the way we pay taxes, and most importantly in how our tax money is being spent by the government. Fiscal transparency is, then, an inextricable component in getting people to pay their taxes, the idea that the government should clearly lay out exactly how it plans on spending our hard-earned money to improve our lives.
Earning the public’s faith in our tax system, then, should be the biggest priority for the government when it comes to revenue collection.
Yes, we should be celebrating any and all progress when it comes to widening our tax net, but are 10.2 million tax-payers enough for Bangladesh to fulfill its near-term economic ambitions?
As things stand, our revenue collection still has far too many deficiencies at a cultural level -- from unequal tax brackets, over-reliance on indirect taxes such as VAT, and loopholes which allow the wealthy to dodge taxes altogether, there is a lot of work to be done. Relying too much on indirect taxes has especially been a sore spot for us as they place far too much pressure on the underclass and even more so on the ultra poor.
While there are no silver bullet solutions for Bangladesh to fix its tax issues, the biggest factor that keeps people from paying their taxes is a lack of trust whether we are talking about the overall idea of paying taxes, the way we pay taxes, and most importantly in how our tax money is being spent by the government. Fiscal transparency is, then, an inextricable component in getting people to pay their taxes, the idea that the government should clearly lay out exactly how it plans on spending our hard-earned money to improve our lives.
Earning the public’s faith in our tax system, then, should be the biggest priority for the government when it comes to revenue collection.
