The country’s tax system should be made more growth-friendly, simple and transparent to increase the tax-GDP ratio and attract more foreign direct investment, experts said at a virtual conference.
The suggestions came at a virtual members’ conference on ‘Policy Paper on Direct and Indirect Tax’ organised by the Institute of Chartered Accountants of Bangladesh (ICAB) on Saturday.
The experts also suggested that the National Board of Revenue should carry out research and take a strategic decision on giving exemptions to increase government revenue from the private sector.
The discussants also stressed the finding of the areas of leakage, eliminating harassment of taxpayers and bringing all taxpayers under the online systems.
Attending the event as the chief guest, planning minister MA Mannan said, ‘The tax issues should be more simplified.’
He said that the discussion would help to remove the complexities in the application of the tax laws and increase transparency.
He also said that the ICAB’s web-based Document Verification System (DVS) would enhance the transparency of financial information, which will ultimately reduce the tendency of tax evasion.
ICAB president Mahmudul Hasan Khusru said, ‘Our tax-GDP ratio is exceptionally low and it is even lower than the ratios in other countries in the region and beyond.’
This indicates that there must be some incompatibilities, he added.
He also said that the tax system in the country was gradually improving, raising more revenues and reducing the dependency on aid.
However, Bangladesh is still a low-tax effort country with a high buoyancy ratio, implying that the policymakers have the scope and potential to opt for greater revenue mobilisation through internal resources in order to meet the budgetary deficit, he suggested.
It is necessary to make reforms by modernising and simplifying our tax system to meet the demands of the changing world, he said.
Mohammad Al Maruf Khan, partner, Howladar Yunus & Co, chartered accountants, and Snehasish Barua, partner, Snehasish Mahmud & Co, chartered accountants, jointly presented the keynote paper.
The keynote paper focused on the general design issues related to making the tax system in Bangladesh more growth-friendly, simple, transparent and fairer.
It also focused on widening the tax net for revenue generation with an aim to achieve a higher tax-GDP ratio.
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