Written by The Banking Post
Tax compliance in Bangladesh will not improve without greater transparency in public spending and fairer tax practices, economists and business leaders said at a seminar in Dhaka on Wednesday, stressing that weak accountability has eroded public trust in the revenue system.
Speakers said taxpayers remain reluctant to comply because they cannot clearly see how their money is being used or what benefits they receive in return. The absence of transparency and fairness, they noted, has weakened confidence and discouraged voluntary tax payment.
“As long as people cannot see where the money collected from them is being spent, tax compliance will not develop,” said Dhaka University Professor Rashed Al Mahmud Titumir. He added that taxpayers want assurance their contributions are used for public benefit.
Masud Khan, chairman of Unilever Consumer Care, echoed the concern, questioning what citizens receive in exchange for their tax payments. “In many countries, taxpayers enjoy a wide range of public services free of cost. Visible services can significantly improve people’s willingness to pay,” he said. He pointed out that only about 20 per cent of tax-eligible individuals in Bangladesh currently pay income tax, placing a heavy burden on a small group of compliant taxpayers.
The speakers also blamed corruption and mismanagement in previous administrations for widespread wastage of public funds, which further undermined public confidence in the tax system.
They criticised the National Board of Revenue’s practice of collecting minimum tax, arguing that it violates the principle of fairness. Under the system, a fixed amount is collected at source and is not refunded even when companies earn low profits or incur losses. “Taxation should be income-based, and companies should not be taxed in the absence of income,” they said.
The discussion took place at a seminar titled “Revenue Challenges and Solutions in Implementing the Commitments of the Post-Election Political Government,” jointly organised by Voice for Reforms and the Bangladesh Research Analysis and Information Network (BRAIN).
