Dhaka:Bangladesh Bank (BB) has embarked on a series of measures aimed at boosting the country's tax-to-GDP ratio by 3 to 3.5 percentage points within the next two years. These initiatives focus on accelerating the digitization of financial transactions to curb corruption, reduce transaction costs, and enhance revenue mobilization.
According to Bangladesh Sangbad Sangstha, Bangladesh's tax-to-GDP ratio stood at 6.78 percent for the fiscal year 2025-26, as per provisional National Board of Revenue (NBR) data, up from 6.70 percent in the previous fiscal year. Md. Sirajul Islam, executive director of Bangladesh Bank, emphasized that comprehensive digitization could expand the tax base, improve transparency, and integrate more economic activities into the formal financial system.
The initiatives include the introduction of person-to-person (P2P) money transfers through Bangla QR starting November 1. This new facility will allow customers to transfer money between participating bank and mobile financial service accounts by scanning another person's QR code or uploading its image through mobile applications. This move is expected to broaden the use of digital payments beyond merchant transactions, making it easier for individuals, small traders, and informal-sector workers to conduct financial transactions without relying on cash.
In addition, starting October 1, 2026, Bangladesh Bank has set the interchange reimbursement fee for Bangla QR transactions at zero and introduced immediate payment settlements for merchants. These measures are intended to lower transaction costs and encourage wider adoption of digital payments, particularly among small businesses.
A study by Bangladesh Bank estimated that cash transactions cost the economy Tk 1.70 trillion annually, equivalent to 3.24 percent of GDP in 2023. In contrast, the digital payments ecosystem's annual cost was estimated at Tk 59.64 billion, or 0.11 percent of GDP. The study further revealed that banks bear Tk 368 billion in annual cash-related costs, while consumers incur Tk 280 billion, and Bangladesh Bank's own cash-related costs amount to Tk 4 billion annually.
The planned digitization efforts are expected to improve tax compliance by generating electronic records that help tax authorities monitor economic activities, identify undeclared income, and enhance compliance with income tax and VAT regulations. Achieving the proposed tax-to-GDP ratio increase will require further integration of banking records with tax administration, wider electronic VAT invoicing, stronger electronic tax filing and payment, and improved information-sharing among government agencies.