Bangladesh sits at the bottom of a list of 37 countries in the Asia-Pacific region in terms of the tax-to-GDP ratio, largely stemming from the failure to tap into the potential originating from the steady growth of the economy and a lack of reform.
The Bangladesh Bank (BB) is unlikely to reduce the policy or repo rate for the second half of this year as inflation continues to remain stubbornly high, according to the central bank governor.
Record remittances lift reserves, but economy burdened by sluggish tax, bad loans, high joblessness
Government borrowing from domestic banks and non-bank sources rose 55 percent year-on-year during the July-April period of the fiscal year (FY) 2024-25, due mainly to weaker foreign loan disbursements and poor tax collection.
Bangladesh’s expenditure on poverty reduction has been gradually declining, and in the upcoming fiscal year of 2025-26, it is set to hit a four-year low due to a decrease in spending that directly impacts hunger.
The government plans to amend the existing sovereign guarantee guidelines to streamline the process and mitigate fiscal risks if public entities fail to make repayments on time, according to a finance ministry report.
If you visit the Dhaka Medical College and Hospital (DMCH), you will find it difficult to make your way through the crowded corridors between the wards. Patients lie on narrow, makeshift beds along both sides, while doctors, hospital staff, visitors, and treatment seekers shuffle through the chaos.
Bangladesh has continued to showcase a weak performance in the open budget rankings among its South Asian peers, reflecting a lack of transparency and accountability in the formulation and implementation of fiscal measures.
Bangladesh’s economy has been growing at an average 6 per cent annually for the last two decades. Yet the country has witnessed a spike in income and consumption inequality.
For the first time, domestic air travellers are likely to face a travel tax while people going abroad on airplanes are expected to pay up to 67 per cent higher taxes from next fiscal year as the government looks to increase revenue collection.
The tax authority, for the first time, is going to engage individuals to help new taxpayers file tax return in a bid to increase compliance and narrow the gap between registered taxpayers and regular return filers.
Owners of more than one car are likely to face an environmental protection surcharge from the upcoming fiscal year as the government plans to discourage the use of vehicles in a bid to contain carbon emissions and air pollution.
The number of people who filed tax returns in fiscal year 2022-23 has crossed 30 lakh for the first time.
The fiscal policy for the ongoing fiscal year has shied away from prioritising macroeconomic stability although several key indicators have come under serious stress owing to internal and external factors, said a noted economist.
Fiscal policy goals set for the current fiscal year have remained elusive as private investment has stagnated, the economic growth has fallen, and inflation has shot up, said a noted economist.
Bangladesh’s public expenditure is not growing in keeping pace with the steadily expanding economy as it struggles to raise adequate revenues, thus failing to ensure full implementation of development programmes and provide expected services to its citizens.
Holders of black money in Bangladesh are unlikely to get the opportunity to legalise their undeclared wealth without facing any questions about the sources of their income in the next fiscal year, officials said.
The government may increase the threshold of surcharge-free net wealth from the coming fiscal year 2023-24 beginning from July – a plan that is likely to reduce the pressure of tax on the upper middle-income people.
