Speakers urge to increase direct tax net

Speakers at a discussion emphasised increasing direct income tax to reduce increasing inequality in taxation system.


They came up with the remarks in seminar titled ‘Combating Inequality and Direct Application to Increase Revenue Income’ organized jointly by Policy Integration for Development (RAPID) and Economic Reporters’ Forum (ERF) at ERF auditorium on Saturday.


If all the taxable persons pay tax according to the income tax slab, it will be possible to achieve 3.1 percent by increasing the current 1 percent personal income tax as a proportion of GDP, they added.


For this, the number of registered taxpayers should be increased. At the same time, if tax exemptions are removed, it is possible to increase taxes by 2 percent of GDP, they opined.


Rapid chairman Dr. Mohammad Abdur Razzaque presented a keynote paper on the topic.


He said Bangladesh’s tax-GDP ratio is 9 percent, which is the lowest in the world. The main reason for this is that there are very few direct tax.


It should increase. Currently indirect tax 65 percent indirect and direct tax 35 percent.


However, the initiative taken by the government to bring direct tax to 70 percent and indirect tax to 30 percent in the coming days is the right decision, Razzaq said.


He said the two problems in Bangladesh are growing inequality and low government spending as a share of GDP. The main reason for this is the lack of direct tax. Although the number of direct tax has increased more than before.


However, in terms of GDP ratio and quantity, it is much lower in almost all countries of the world, including India, Bhutan, Malaysia, the government’s income is more than that of Bangladesh.


Although the poor people of the country pay the highest VAT in proportion to their income. And people with higher income pay the least VAT.


He suggested to introduce social insurance system, by which evry person income will be counted and it will be easy collection tax.


Former NBR chairman Dr Nasir Uddin Ahmed, additional secretary of finance ministry Kabirul Ezdani Khan, professor development studies of DU and Executive Director, RAPID Dr. Abu Eusuf, among others, spoke in the seminar.


Source: United News of Bangladesh