pulak dasgupta
Dec 30, 2023
Why Bangladeshi taxation not add a good return to it's GDP?
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Dec 30, 2023
There could be several reasons why Bangladeshi taxation may not contribute significantly to its GDP:
1. Low tax base: Bangladesh has a large informal economy, with a significant portion of economic activities taking place outside the formal tax system. This limits the tax base and reduces the potential revenue that can be generated through taxation.
2. High tax evasion: Tax evasion is a significant issue in Bangladesh, with many individuals and businesses underreporting their income or finding ways to avoid paying taxes. This reduces the overall tax revenue collected by the government.
3. Inefficient tax administration: The tax administration system in Bangladesh may suffer from inefficiencies, corruption, and lack of transparency. These factors can hinder the effective collection of taxes and reduce the overall contribution to GDP.
4. Tax exemptions and incentives: The government of Bangladesh provides various tax exemptions and incentives to promote investment and economic growth. While these measures can attract businesses and stimulate economic activity, they also reduce the tax revenue collected.
5. Limited tax reforms: The tax system in Bangladesh may lack comprehensive reforms to address the challenges mentioned above. Without adequate reforms, it becomes difficult to improve tax collection and ensure a fair and efficient taxation system.
Addressing these issues requires a combination of measures, including expanding the tax base, improving tax administration, reducing tax evasion, and implementing comprehensive tax reforms. By doing so, Bangladesh can enhance its tax revenue collection and contribute more effectively to its GDP.
1. Low tax base: Bangladesh has a large informal economy, with a significant portion of economic activities taking place outside the formal tax system. This limits the tax base and reduces the potential revenue that can be generated through taxation.
2. High tax evasion: Tax evasion is a significant issue in Bangladesh, with many individuals and businesses underreporting their income or finding ways to avoid paying taxes. This reduces the overall tax revenue collected by the government.
3. Inefficient tax administration: The tax administration system in Bangladesh may suffer from inefficiencies, corruption, and lack of transparency. These factors can hinder the effective collection of taxes and reduce the overall contribution to GDP.
4. Tax exemptions and incentives: The government of Bangladesh provides various tax exemptions and incentives to promote investment and economic growth. While these measures can attract businesses and stimulate economic activity, they also reduce the tax revenue collected.
5. Limited tax reforms: The tax system in Bangladesh may lack comprehensive reforms to address the challenges mentioned above. Without adequate reforms, it becomes difficult to improve tax collection and ensure a fair and efficient taxation system.
Addressing these issues requires a combination of measures, including expanding the tax base, improving tax administration, reducing tax evasion, and implementing comprehensive tax reforms. By doing so, Bangladesh can enhance its tax revenue collection and contribute more effectively to its GDP.
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