Bangladesh spends only 22 paisa for collecting every one hundred taka as revenue, which is said to be one of the lowest in the world.
The figure when translated into percentage comes to a mere 0.22 percent, which means Bangladesh spent about Tk 5,78 corer in the last fiscal against Tk 2,62,787 crore collected as revenue.
This information was revealed in a research document published by the National Board of Revenue (NBR).
The research report was presented at a function held at the Institute of Diploma Engineers in the capital on December 10 on the occasion of National VAT Day and VAT Week-2021.
Speaking on the occasion, NBR VAT member Masud Sadiq said that there is ample potential for revenue generation in Bangladesh.
“If you invest more in this case, you will not fail, the return will come,” he added.
According to NBR statistics, after independence, the total revenue collected in 1971-72 was around Tk 166 crore. In the last financial year, it has increased to Tk 262,787 crore.
In fifty years, the total revenue collection of the country has increased more than 1583 times.
Revenue experts, including economists, believe that there is a possibility of increasing the efficiency of the Board of Revenue, bringing the entire revenue department, including VAT, customs and income tax, under automation and reducing corruption.
According to the research report, expenditure on revenue collection in India is higher than in Bangladesh. In India Tk 100 revenue collection costs is 60 paisa and 71 paisa in Thailand.
In developed countries, the cost is even higher, the report said.
In Japan, the cost of collecting Tk 100 of revenue is 70 paisa, which is almost eight times more than Bangladesh. Apart from this, the cost in Malaysia and Singapore is Tk 1 and 69 paisa respectively.
Although the cost of revenue collection is low, the collection of Bangladesh in terms of gross domestic product (GDP) is the lowest in the world.
At current market prices, the size of Bangladesh's GDP is currently Tk 3,000,000 crore. Of this, the revenue income is only Tk 262,000 crore.
The executive director of the private research firm PRI and a former official of the IMF, the current chairman of BRAC Bank. Ahsan H. Mansoor said, "Revenue collection is not at all consistent with the size of our economy."
According to the size of the economy, the annual revenue collection should be at least Tk 5 lakh crore. There is a tendency to evade the revenue sector."
He further said that the restructuring of the Board of Revenue has become urgent. At the same time VAT, customs and income tax departments need to be connected to each other, he mentioned.
If these reforms are implemented, the desired revenue is possible, he said adding, this will increase the tax-to-GDP ratio.
"At present, the tax-revenue ratio in Bangladesh is 10 percent. This ratio is the lowest in the world," he said.
Experts blame the weak tax culture behind this. According to them, the tax exemption facility in Bangladesh is more than many other countries in the world.
The International Monetary Fund has always said that there are more tax exemptions in Bangladesh.
The company has been pressuring the government to reduce exemptions to increase collection.
The NBR has recently given an account of the amount of revenue loss per year due to tax exemptions, reduced tax rates and tax rebates.
It shows that as a result of providing these facilities, 2.28 percent of the GDP goes away.
Speaking on the occasion of VAT Day, the NBR chairman said, "Tax exemption is necessary for the greater good of the country. Because it involves growth and employment. But it should be sorted out."
