How smart solutions to tax reform can help develop infrastructure
The fourth academic research to be released identifies the smartest way to strengthen the tax base in Bangladesh by tweaking and automating the VAT.
Bangladesh's public sector faces serious challenges. Poor infrastructure is one of the main factors that hold back economic growth. Government-funded health clinics struggle to provide the population with quality, specialized services. And beyond primary school, quality public education opportunities are extremely limited. These are just a handful of the challenges, and they are partly due to a stark fact: the country has one of the lowest tax-to-GDP ratios in the world.
Government tax revenue is equal to just 11 percent of the size of the entire economy. So despite the fact that Bangladesh has great potential to boost revenue earnings, much of it goes untapped.
Over the next five years, the government aims to increase this tax-to-GDP share to 14 percent. What are the best ways to accomplish this, providing the government with resources to improve public services that the people rely upon?