Bangladesh stands at a critical fiscal crossroads, and the warning signs are too stark to ignore. The Centre for Policy Dialogue's latest recommendations for the National Board of Revenue (NBR) underscore a reality policymakers have long sidestepped: the country's revenue system is not merely underperforming, it is structurally unsound.
A tax-to-GDP ratio of 7.3 percent, the lowest in Asia, reflects more than weak collection; it reveals deep-rooted inefficiencies, widespread evasion, and a persistent failure to broaden the tax base. Ambitions to raise this ratio to 10 percent in the medium term and 15 percent by 2035 will remain aspirational unless reform moves beyond rhetoric.
The call to criminalise habitual tax evasion and non-filing is bound to provoke debate, but the logic is difficult to dismiss. A system that tolerates chronic non-compliance undermines both fairness and functionality. Honest taxpayers shoulder a disproportionate burden while evaders operate with near impunity. Still, enforcement must be calibrated. Without transparency and safeguards, punitive measures risk being misused, eroding public confidence rather than restoring it.
Digitalisation of tax filing is another reform whose time has come. Manual processes have long enabled inefficiency and discretion, often opening the door to corruption. A fully digital system can streamline compliance, improve monitoring, and reduce leakages. Yet the transition must be managed carefully. Without adequate support, smaller businesses and individual taxpayers could be left behind, defeating the purpose of inclusivity.
Equally significant is the proposal to align corporate tax rates with the global minimum of 15 percent. In a rapidly evolving international tax environment, Bangladesh must remain competitive while ensuring fairness. However, statutory rates tell only part of the story. The real burden often exceeds legal limits due to inconsistent enforcement and arbitrary disallowances. Rationalising these distortions is essential to create a predictable investment climate.
The critique of indiscriminate tax incentives is both timely and necessary. For years, generous concessions have been extended without clear accountability, weakening the revenue base without delivering proportional economic gains. Linking incentives to measurable outcomes, such as job creation, export growth, and capital investment, can ensure that public resources generate tangible returns.
At its core, the CPD's message is about equity. Tax policy is not just an economic tool; it is a social contract. Proposals to channel VAT revenues into social protection and reinvest taxes from essential services into broader access reflect a recognition that fiscal reform must also address inequality.
The path forward is neither simple nor politically easy. But the cost of inaction is far greater. Without decisive reform, Bangladesh risks perpetuating a cycle of low revenue, high inequality, and constrained development. The time for incremental change has passed. What is needed now is a bold, coherent, and sustained effort to rebuild the foundations of the country's fiscal system and with it, public trust.
