Authorities must book tax evaders under legal network for punishment
ACCORDING to the Tax Justice Network (TJN) report, Bangladesh faces significant annual tax losses due to multinational companies shifting profits to tax havens abroad and private individuals engaging in global tax evasion.
The country is losing approximately $361 million each year from corporate profit-shifting and an additional $26 million from tax evasion by individuals. This combined loss amounts to 0.1 per cent of Bangladesh’s gross domestic product (GDP).
The report highlights that multinational companies move around $1.4 billion in profits out of Bangladesh annually, contributing to the overall tax losses experienced by the country. The total annual tax loss for Bangladesh is estimated to be $387 million, representing 1.5 per cent of its tax revenue, which is higher than the regional average.
To put this into perspective, the tax loss suffered by Bangladesh is equivalent to nearly one-third of its health budget or 6.19 per cent of its education spending. This indicates the significant impact of tax evasion and avoidance on the country’s ability to fund critical sectors.
Experts note that tax evasion and avoidance are widespread issues within Bangladesh’s domestic circuit. In today’s interconnected globalised world, it is challenging to escape the negative effects of tax havens, and any country with a presence of multinational corporations is susceptible to these risks.
The TJN’s State of Tax Justice 2023 report reveals that countries worldwide collectively lose $472 billion in tax revenue annually due to global tax abuse. The largest portion of this loss, $301 billion, is attributed to multinational corporations shifting profits to tax havens, while $171 billion is lost due to individuals hiding their wealth offshore.
To stop tax evasion, the government must establish a rule of law that will act blind for all. As a tax-deficit and budget-deficient country, Bangladesh should stop tax evasion and book all tax evaders under the legal net; however, we observe the government is supportive to tax evaders due to political suffrage.
