There is no denying that Bangladesh's economy has grown at a fast and more or less constant rate since the early 90s. Similarly, our dependence on foreign loans and grants for development budget had also reduced after, among others, the introduction of VAT.

Various financial reforms and expanding and strengthening the private sector have contributed significantly to this growth. Exports have been diversified but still focus on garments and manpower. Currently, our GDP is at Tk 5 million crore with an average growth of 6 percent. Per capita income has also grown significantly, registering above $2,750.

This indicates that nationally, in spite of the economic growth, the number of taxpayers and revenue collection has not reached the desired level. The tax-GDP ratio is still below 7.5 percent compared to an average of 19 percent in the Asia Pacific and 34 percent in member countries of the Organisation for Economic Co-operation and Development.

There are about 10 million TIN holders in Bangladesh, of which only 3.4 million individuals and 34,000 corporates file tax returns covering all categories. The reasons for non-filing of tax returns need close scrutiny and monitoring. The possibility of TIN duplication cannot be ruled out either.

Of the total revenue collection of Tk 382,562 crore in fiscal 2023-24, the category-wise proportions of tax collection reveal that 13 percent came from individuals, 20 percent from corporates, 40 percent from VAT and 26 percent from other sources.

This indicates lower levels collection from corporate taxes. Many businessmen and entrepreneurs claim that they are paying huge revenue to the government exchequer. But the question is what the proportion between direct tax and indirect tax is.

It is well known that indirect taxes are added to product costs and recovered from consumers. So, there is no credit for it. It is a fact that our economy is currently passing through a challenging phase. The shortage of foreign currency has hampered imports, impacting production and exports while the cost of production has risen due to inflation. Businesses were also impacted by the recent mass movement.

In such a situation, it is very unlikely to collect significant revenue from businesses. However, minimising tax evasion and combating corruption are possibly the low hanging fruits to increase revenue collection.

In spite of various efforts over the years, adequate laws and regulations and pressure from the government, revenue collection could not be increased to the desired level.

People's apathy toward tax payments, tax evasion and corruption are the principal causes for this situation. On the other hand, in most cases corruption takes place principally by taxpayers in connivance with tax officials and consultants. The lack of transparency and accountability through reliable financial reporting is also responsible for this situation.

Credible and authentic financial statements are the basis of tax calculation. Unfortunately, many businesses are not reporting financial statements properly. Tax audit is the only way to mitigate this situation. It is important for the tax auditor to be different from statutory auditors. Similarly, there is no alternative to digitalisation to ensure transparency and accountability.

Besides, corruption has gone beyond tolerable levels so this must be controlled. Enforcement of law should be applied in a stringent way when tax evasion involving significant amounts is identified.

Finally, administrative and policy reforms for the National Board of Revenue are overdue. Also, genuine and regular taxpayers should be rewarded by minimising unnecessary harassment by way of arbitrary disallowances, simplifying the refund process and other similar incentives.

The author is a senior partner of Hoda Vasi Chowdhury & Co and former president of ICAB