National-level dialogue on taxation: Indirect taxes eat up poor’s income

Staff Reporter :
The government heavilyrelaying on indirect taxes to collect revenue over the years eats up the income of the low-income people and makes the poor poorer, said the speakers in a national-level dialogue organized by WAVE foundation on yesterday.

As the proposed budget for the financial year of 2023-24 have no difference with previous years, depend alarmingly on indirect tax enervated further pressure on common people and propel dissemination in the society, they expressed.

The national-level dialogue titled “Progressive Taxation in Bangladesh: Necessity and Implementation ” was organized by WAVE Foundation collaboration with Christian Aid in the capital’s CIRDAP auditorium on Thursday.

The dialogue was presided by Dr. Syed Md. Aminul Karim, former Member, National Board of Revenue (NBR), MM Fazlul Haque, Director General (DG), BCS Tax Academy was presentas the chief guest at the program.

Speaking on the occasion, Dr. Syed Md. Aminul Karim, former Member, National Board of Revenue (NBR), said that it is necessary to promote progressive tax structure in the country. The expansion of tax net based on proportionality also need to be ensured.

MM Fazlul Haque, Director General (DG), BCS Tax Academy, said “We are to shift our focus form indirect to direct tax to ensure social equity. Measures are being taken in this regard and other reforms are under way.The process of change is following a steady and inclusive pathway.”

Khandaker Tahsin Ashrafi, project officer, of the Promoting Citizens Participation for Progressive Taxation Project, said a person earning Tk200 per day is subjected to the same 15% VAT rate as someone earning Tk 2,000-3,000 per day when purchasing the same products which is an example of regressive tax system in Bangladesh.

The majority of the country’s population, including the poor, bears the highest tax burden through VAT, product import tax, supplementary duty and other indirect taxes.

At the meeting, speakers proposed several measures, including raising the tax-GDP ratio, reducing tax exemptions, improving accessibility to tax information through the NBR Data Centre, and increasing tax rates on investment income and assets such as property, wealth and inheritance.