Saturday, June 15, 2024


Dhaka Tribune

Going digital with our taxation

A revamped and efficient tax regime is a prerequisite

Update : 21 May 2024, 10:43 AM

To say that Bangladesh's taxation system has long grappled with chronic underperformance would at this point be a gross understatement. Of all our collective failures as a nation despite the stellar progress and achievements, perhaps nothing is as glaring as our woeful taxation system that every year fails to come close to its set targets.

To that end, digitalization presents a promising avenue; Bangladesh has long embraced going digital to help it achieve economic progress, and it should be a no-brainer to embrace going digital with our tax system. Indeed, as per experts at a recent policy dialogue, Bangladesh could boost its revenue to $167 billion by the fiscal year 2030 through the sustained digitalization of its taxation system.

The underperformance of the tax system has had severe ramification, including a persistently low tax-to-GDP ratio that lags far behind regional peers. While it is easy to be critical of the government on many avenues, the fact of the matter is that this dismal revenue mobilization has all but hamstrung the government's ability to allocate adequate resources for critical sectors like health, education, and social safety nets - ultimately impeding the nation's development trajectory.

While it cannot be said that we have not initiated various reform measures, these efforts have yielded limited success due to structural deficiencies and implementation challenges. Our reality is that we have perpetuated the status quo, leaving our tax system mired in inefficiency and opacity.

While digitalization has worked for Bangladesh, any technological interventions must first be complemented by robust institutional reforms; the NBR’s issues cannot be magically erased with going digital, and the need to address deep-rooted issues such as corruption, capacity building, and stakeholder engagement has no alternative.

As we prepare to graduate from the least developed country status in 2026, a revamped and efficient tax regime is a prerequisite for fostering self-reliance and continuing our progress as a nation.

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