Dhaka: Bangladesh lost an estimated Taka 226,236 crore in tax revenue in 2023 due to tax evasion and avoidance, according to a study. Of this amount, it was estimated that around 50 percent was lost due to corporate tax evasion. The estimated corporate tax evasion in 2023 amounted to roughly Taka 113,118 crore, the study said.
According to Bangladesh Sangbad Sangstha, the Center for Policy Dialogue (CPD) unveiled these findings at a briefing on corporate income tax reform for graduating Bangladesh at its office in the capital. The study unearthed a sharp rise in tax evasion since 2011, with estimates reaching Taka 96,503 crore in 2012. Research Director of CPD Dr Khondaker Golam Moazzem presented the findings of the study at an event titled ‘Corporate Income Tax Reform for Graduating Bangladesh: The Justice Perspective’ held at its office in the capital’s Dhanmondi area. Researcher M Tamim Ahmed made the keynote presentation on the findings of the study jointly carried out by Christian Aid in Bangladesh and CPD.
The CPD identified several root causes behind Bangladesh’s persistent tax evasion problem, including high tax rates, weak enforcement, complex legal frameworks, and widespread corruption within the tax system. The report emphasized that from a tax justice perspective, high levels of tax evasion undermine compliance by discouraging honest taxpayers and increasing the burden on those who comply with the law.
Speaking on the occasion, Dr Golam Moazzem highlighted that aside from tax evasion, the government is also losing significant revenues due to incentives and tax exemptions. He pointed out that sector-wise tax exemptions are being provided citing investment, and such practices should be halted. He criticized the incentive structure of Bangladesh as being politically motivated and stated, “We’ll have to come out from such structure.”
The CPD Research Director noted that Bangladesh’s upcoming graduation from the Least Developed Country (LDC) status poses a challenge, as it is expected to increase investments from multinational companies and consequently, the risk for tax evasion and tax exemptions will rise. To address this, the CPD recommended enhancing institutional capacity, improving digital tax structures, and implementing policy reforms.
The CPD also emphasized the importance of aligning with global tax agreements and fostering international cooperation to ensure a fair and transparent tax regime.