Dhaka: Attaching importance to boosting the existing tax-to-GDP ratio in the country, Finance Adviser Dr. Salehuddin Ahmed today emphasized modernizing the tax administration and making revenue management more taxpayer, IT, and business-friendly.
According to Bangladesh Sangbad Sangstha, Dr. Ahmed underscored the urgent need to curb VAT leakage, widen both VAT and income tax coverage, and modernize Bangladesh's tax administration to reduce public hassle and boost domestic resource mobilization.
"Bangladesh's economic progress depends fundamentally on its ability to mobilize domestic resources rather than relying excessively on foreign loans and grants," he said. Dr. Ahmed made these remarks while addressing a seminar organized for "VAT Day and VAT Week 2025" at the Multipurpose Hall of the Revenue Board Building in the capital's Sher-e-Bangla Nagar. The seminar featured speeches from Finance Secretary Dr. Md Khairuzzaman Mozumder, Economic Relations Division Secretary Md Shahriar Kader Siddiky, and others, with NBR Chairman Md Abdur Rahman Khan presiding over the event.
Dr. Ahmed stressed that VAT remains one of the most powerful and modern forms of taxation worldwide, yet Bangladesh collects far less VAT as a share of GDP compared to neighboring countries, even though the economy has expanded significantly. He pointed out that a major obstacle is VAT leakage at the retail and business levels, noting, "A very unfortunate reality in Bangladesh is that VAT sometimes doesn't reach the government's treasury."
The Finance Adviser called for a fundamental shift in mindset among businesses and consumers so that both parties accept VAT as a national obligation and insist on proper documentation and compliance. He urged customers to demand VAT invoices and expect businesses to remit VAT properly, emphasizing that paying VAT ultimately benefits them through improved public services.
Dr. Ahmed also expressed concern over the country's chronically low tax-to-GDP ratio, stating that Bangladesh cannot fulfill its development ambitions without strengthening domestic revenues. He highlighted that priority sectors such as education and healthcare remain constrained when the State relies on external borrowing. "The biggest challenge is that our tax-GDP ratio is extremely low. Without increasing our own resources, how will we carry out development work?" he said.
He argued that widening the base of both VAT and income tax is essential, noting that in many advanced economies, taxpayers contribute up to 26 percent of their income because they trust their money is used transparently. "For people to pay tax willingly, the government must ensure that taxpayers receive services and trust that their money is used properly," Dr. Ahmed stated.
The Finance Adviser urged the National Board of Revenue (NBR) to broaden the system, modernize processes, and make tax compliance more convenient. He emphasized an IT-driven, business-friendly, and people-friendly approach where taxpayers are not harassed, and filing and payment are simplified. He suggested gradually reducing reliance on supplementary duties, increasing the share of income tax and VAT, and strengthening non-tax revenues.
Dr. Salehuddin Ahmed expressed optimism that if reforms continue over the next two months, a significantly modernized and streamlined system will be ready for the next government to advance. He urged all stakeholders, including businesses, consumers, and NBR officials, to disseminate VAT awareness widely, so customers across the country demand proof of VAT payment during shopping and help close leakages.