About 68 per cent of the individuals who are eligible for paying income tax do not pay the tax, according to a survey conducted by Centre for Policy Dialogue.
More than one-thirds of the highest earnings group in the country also does not pay the tax, the survey titled Public Perception on Tax Compliance Survey-2018 found.
CPD conducted the survey on 1,200 individuals having at least annual income of more than Tk 2.5 lakh, the tax-free income limit in the country.
‘Only 32 per cent of the respondents of the survey claimed that they paid income tax in last year,’ according to the findings of the survey released on Thursday at a dialogue on catalysing development finance for Bangladesh held at Khazana Gardenia Hall in Dhaka.
Though the tax compliance rises with the increase in income, 37 per cent of the highest income quartile (25 per cent of top earners) of the population did not pay tax in the year, it revealed.
Around 75 per cent of the taxpayers think the existing tax system inherently favours the rich or elite groups of the country while half of them consider the tax system is complex, it said.
Some 65 per cent of the respondents believe that corruption is prevalent in the taxation system.
CPD senior research fellow Towfiqul Islam Khan presented the findings of the survey.
He said that only 38 per cent of the respondents said that taxpaying system was easily available in their areas.
Most of the eligible individuals, however, said that social welfare was the target of tax collection and tax payment was their obvious duty, he said.
Around 85 per cent also believe that an increased provision and quality of public services would induce people to pay taxes, he added.
Regarding value-added tax, 79 per cent of the respondents found incidences of VAT avoidance were occurring regularly.
CPD executive director Fahmida Khatun presented another study report on necessity of foreign loans and grants for the country at the programme.
Analysing data, CPD found that foreign loans and grants or official development assistance had no significant impact on economic growth.
The study, however, found significant impact of ODA in development of health sector as health aid had significant impact on reducing infant mortality rate, under-five mortality rate and child death rate.
Fahmida said that the need for ODA in development activities of the country was still significant and raising efficiency in aid utilisation would become more important in the coming days.
Speakers at the dialogue also said that Bangladesh would require more foreign loans and grants to continue economic development and meet the investment need of the country.
Former adviser to an interim government AB Mirza Azizul Islam said that foreign assistance would remain critical in the coming years but proper and effective utilisation of debt would be must.
He also emphasised increasing domestic resource mobilisation to meet the need of development finance.
CPD distinguished fellow Debapriya Bhattacharya urged National Board of Revenue to impose higher tax on assets to remove rising wealth inequality in the country.
He also put emphasis on expending more on social infrastructure including health and education saying that per capita expenditure in actual value on health and education had become stagnant as Padma Bridge was being constructed with self-financing.
Metropolitan Chamber of Commerce and Industry president Nihad Kabir said that quality public services were required to motivate people to pay taxes.
Bangladeshi people are too tolerant to the quality of public services like transport system, health and education, she observed.
NBR chairman Md Mosharraf Hossain Bhuiyan said that they had taken various measures including expansion of tax administration to increase the number of taxpayers and enhance domestic resource mobilisation.
‘We will also conduct a survey on apartments and flats in cities to find whether flat owners and tenants have tax files or not,’ he said.
CPD distinguished fellow Mustafizur Rahman and International Monetary Fund resident representative Ragnar Gudmundsson spoke, among others, at the programme.
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