A bellyful of taxes, a mouthful of silence
As debate over tax expansion intensifies, this piece argues that Bangladesh’s fiscal future depends not on burdening compliant earners further, but on enforcing fairness, widening the net, and ensuring the wealthy finally pay their due
The recent signals from our new finance and planning minister regarding expansion of the tax net have sparked a necessary, if slightly confused, national conversation. Reports from the media recently suggested a potential general tax increase, but I believe this was a simple interpretation error rather than a statement of intent.
Given the current economic climate, I highly doubt there is any remaining capacity to further squeeze the existing tax base. Compliant taxpayers in Bangladesh are already stretched to their limits, with rising costs and emerging economic hurdles forcing a contraction in both savings and daily consumption.
Last November, I followed my longstanding practice of submitting my return in the first week of the month, resulting in an eight-digit tax payment including a significant wealth surcharge. Layer on the five to fifteen percent VAT we pay on virtually every point of consumption, and the total contribution to the national kitty becomes staggering.
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It is difficult to remain stoic when one sees peers in the business community, or even within government circles, who maintain equal or louder lifestyles while seemingly contributing almost nothing. This brings me to a blunt truth many in our professional circles feel deeply: only the professionals pay from their tummy.
By paying from the tummy, I mean that for a salaried expert or a transparent consultant, taxation is a visceral, physical experience. There are no buffers, no offshore shields, no creative accounting manoeuvres to soften the blow. The tax comes directly out of the resources meant for our families, our health, and our future security. It is a hefty and lonely process.
While we serve as the reliable backbone of the revenue system, a vast ocean of wealth remains untapped. Despite this frustration, I must acknowledge that at a time when Bangladesh is grappling with limited fiscal capacity and growing public expenditure needs, a more progressive tax structure is not just a policy preference: it is a survival imperative.
Recent reports suggest the government is considering raising the top income tax rate from thirty percent to thirty-five percent for individuals earning above one crore taka annually. This is a long-overdue acknowledgement that those with the greatest financial capacity must shoulder proportionately greater responsibility for the nation's development. However, we must also be willing to review the definition of the ultra-rich in a world changing at breakneck pace. Wealth today is often mobile and intangible, and a modern tax code must be agile enough to capture it.
For far too long, the tax ecosystem in Bangladesh has leaned disproportionately on middle-income earners and salaried professionals. These individuals are taxed at the source, leaving zero room for evasion or even delay of payment. Meanwhile, many affluent entities and politically linked individuals continue to exploit loopholes or avoid proper declaration altogether. The burden is visible and immediate for the honest citizen, but largely optional for those with the right connections.
Raising the top rate must go hand in hand with a revolution in enforcement. Without robust mechanisms to track income, prevent evasion, and ensure compliance across the board, higher rates risk becoming purely symbolic. I will repeat my core concern: the government must prioritise broadening the tax net rather than adding new weight to those already carrying the load.
Our tax-to-GDP ratio sits at roughly 7.1%, significantly lower than regional peers and among the lowest globally. Improving collection efficiency is at least as important as adjusting the rates.
Equally critical is the question of accountability. Citizens are far more likely to accept the burden of taxation when there is transparency in how revenue is collected and, more importantly, how it is spent. Digitisation of our tax systems and reduction of discretionary power at the point of collection would go a long way in reducing harassment and corruption. When a professional pays from their tummy, they deserve to see that contribution building the infrastructure, schools, and healthcare systems the nation requires.
Tax reform must not become another avenue for pressuring the already compliant. It should expand the net upward, toward those who have remained beyond meaningful scrutiny for far too long. A truly fair system is not one where everyone simply pays more, but one where everyone pays what they truly owe, with dignity and perhaps even a bit of encouragement from the state.
Mamun Rashid is an Economic Analyst and was a Lead Consultant with the TACTS project at the National Board of Revenue.
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.
