Fiscal Management & Revenue Mobilization
Government tax revenue is equal to just 11 percent of the size of the entire economy in Bangladesh. So despite the fact that the country 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.
When it comes to strengthening the tax base, the VAT is a crucial issue, because revenues collected from it and income tax combine to account for 70 percent of all tax revenue.
Proposed Strategy
| Strategy | Takas of benefits per taka spent |
|---|---|
| Reform VAT and automate collection | 6 |
Strengthening the tax base in Bangladesh
Research by Bazlul H. Khondker, a professor of Economics at the University of Dhaka, and Biplob Kumar Nandi, a senior lecturer of economics at East West University, find that modifying the VAT and its collection is one of the most promising strategies to mobilize more resources for government.
Although Bangladesh has maintained a sustained growth rate of over 6 percent in recent years, tax revenue-to-GDP ratio remains at around 10 percent, one of the lowest in the world."
- Biplob Kumar Nandi & Bazlul Haque Khondke
How smart solutions to tax reform can help develop infrastructure
In a series of op-eds published in The Daily Star and Prothom Alo, Bjorn Lomborg outlined the key findings of the path-breaking research produced by the Bangladesh Priorities project.
When it comes to strengthening the tax base, the VAT is a crucial issue, because revenues collected from it and income tax combine to account for 70 percent of all tax revenue." - Bjorn Lomborg
What's the smartest solution for Bangladesh?
Mobilizing more resources for government could help improve many public services and goods, including the massive infrastructure needs of the country. But is mobilizing more government resources the best way to help Bangladesh? After reviewing 1,000s of pages of peer-reviewed research an Eminent Panel ranked 72 solutions from the best to the worst in terms of delivering the most social, economic and environmental value for money. Find out what they ranked the highest here.