If someone randomly asked, “How many of you know your responsibilities as a citizen?” -- how many would confidently answer? The reality is that civic duties remain an obscure concept for many, particularly in developing countries like Bangladesh. This obscurity is not accidental. As Michel Foucault argued, the state often constructs layers of complexity that make civic engagement difficult, keeping citizens disengaged from their fundamental responsibilities. This disengagement extends to one of the most critical aspects of governance: Taxation.
Despite steady economic growth, Bangladesh struggles with an alarmingly low tax-to-GDP ratio, which severely hampers the government's ability to provide essential public services. A lack of public trust in institutions, an over-reliance on indirect taxes, and the large informal economy contribute to widespread tax evasion. Without urgent fiscal reforms and a cultural shift toward civic responsibility, Bangladesh risks falling into an unsustainable cycle of debt, weak infrastructure, and stalled development.
A crisis of contributions
One of the most pressing development challenges Bangladesh faces is its low tax-to-GDP ratio -- hovering around 7.8%, one of the lowest in South Asia. This directly impacts the state’s ability to provide public services, exacerbating weaknesses in infrastructure, healthcare, education, and social protection programs.
Without an adequate revenue base, the government struggles to expand its fiscal space -- the room within its budget to increase spending without jeopardizing its financial stability. This, in turn, creates a vicious cycle: Public institutions remain inefficient, citizens perceive little return on their taxes, and tax compliance weakens further.
From persistent budget deficits to rising external debt, from underfunded healthcare and education sectors to over-reliance on foreign loans, every major fiscal challenge Bangladesh faces today is tied to this shrinking revenue base. The lack of civic responsibility in tax compliance is not merely a failure of policy -- it is a failure of the social contract itself.
Understanding the social contract: What did Rousseau say?
Jean-Jacques Rousseau’s Social Contract (1762) is foundational in understanding governance and civic responsibility. Rousseau asserts that sovereignty belongs to the people and governments must reflect the general will. While this principle demands state accountability, he also stresses citizens' obligations to ensure a functional state. Governance, he argues, is a mutual relationship between rights and responsibilities.
A society cannot function if citizens don’t contribute to the common good. Civic responsibility requires individuals to align their interests with collective well-being, not only obeying laws but actively supporting them. Weak governance arises when citizens disengage. The general will, the collective interest, gains meaning only when people actively participate in shaping and upholding it. Obeying laws is a core obligation, but Rousseau also emphasizes that citizens must fulfill financial obligations, like taxes, to support public services.
Why is tax compliance so low in Bangladesh?
Despite Bangladesh's steady economic growth, the country struggles with low tax compliance due to inefficiencies in the tax system. The narrow tax base places a disproportionate burden on formal sector employees, while the informal economy remains largely untaxed. Public distrust in institutions and over-reliance on indirect taxes further discourage compliance.
This low tax-to-GDP ratio contributes to the rising national debt, with each child born today inheriting nearly Tk1 million in public debt. Expanding fiscal space and restoring the social contract between the state and citizens is crucial.
Strengthening tax collection requires modernizing the National Board of Revenue (NBR) through digital tax filing systems, ensuring high-income earners contribute fairly. Broadening the tax base by formalizing the informal sector and enforcing property taxes can boost revenues and address fiscal challenges.
If we demand accountability from the state, we must also demand accountability from ourselves
Rebuilding public trust and shifting perceptions
Rebuilding public trust is crucial. Greater transparency in budget allocation, public audits, and social accountability mechanisms can boost confidence. Many citizens evade taxes, believing their contributions are misused due to corruption. A transparent system with public oversight can counter this perception.
In addition, fostering civic responsibility through tax education and awareness campaigns can shift views, framing taxation as an investment in national development. When taxpayers see improvements in roads, schools, and healthcare funded by their contributions, they are more likely to comply. Therefore, the government must effectively communicate how tax money is used.
Moreover, enforcing tax laws fairly and consistently is vital. Selective enforcement, where only salaried professionals and registered businesses bear the burden while politically connected elites evade taxation, weakens system confidence. A fair, impartial tax regime with incentives for voluntary compliance can significantly improve revenue collection.
The informal economy: A hidden goldmine
Bangladesh’s informal economy -- constituting nearly 85% of total employment -- is a major challenge for tax collection. Street vendors, small businesses, and cash-based service providers operate outside the formal tax system, depriving the government of much-needed revenue. Bringing them into the tax net through simplified schemes, tax holidays for new registrants, and mobile tax payment systems can encourage compliance.
Countries like Indonesia and India have implemented small-business tax schemes where firms pay a flat, low-rate tax in exchange for simplified filing procedures. A similar approach in Bangladesh could generate substantial revenue while gradually transitioning informal businesses into the formal economy.
The future of Bangladesh’s social contract
The July-August revolution has awakened a renewed sense of responsibility in Bangladeshis. It signals a collective aspiration for change, where citizens recognize their role in shaping the future. But how sustainable is this momentum?
We must ask: How long can Bangladesh sustain its development model on borrowed funds? If we want better public services, secure property rights, and a higher quality of life, we must be willing to contribute to the system that makes these possible.
If we demand accountability from the state, we must also demand accountability from ourselves. It is time for citizens to become active players, not just spectators in the development narrative. Instead of skepticism, can we give Bangladesh the benefit of the doubt and work toward solutions?
The social contract is not a one-way street. We cannot expect rights without fulfilling responsibilities. If we genuinely want a prosperous, self-sufficient Bangladesh, we must honour our side of the contract.
Arju Afrin Kathy is a Development Professional.
