‘Administrative problems in taxation are bigger than political’

Staff Reporter :
Speakers on Tuesday said that the administrative problems in taxation are bigger than political in the country and the loopholes of tax administration and collection procedures should be identified.

They also said the country has made a significant progress in many fields like GDP growth, poverty reduction and women participation in workplace, but it has slowed amid the economic reality.

They came up with the observation while speaking at a public lecture on “State Effectiveness and the Challenges of Development” organized jointly by the Policy Research Institute of Bangladesh (PRI) and the UK Foreign, Commonwealth and Development Office (FCDO) at a city hotel.

Speaking at the event, Dr Mashiur Rahman, Adviser to the Prime Minister’s Economic Affairs, said, “We must identify the loopholes of tax collection procedures and tax administration for the development of tax system of the country.”

“Focus should be given on administration involved in tax collection to improve tax performance and system at large as the administrative problems are bigger than political in tax system. Otherwise, it will remain a state problem,” he added.

He further said, “Tax officials need to be efficient.

Officers should have a good knowledge about industry and business.

If there is no good idea about it, it can sometimes create frustration for entrepreneurs.”

Claiming that enforcing to pay tax creates many problems, he said, “It is not possible to collect 100 per cent tax through coercion.”

Tax rates need to be fixed in such a way that tax payers are encouraged to pay taxes, he added.

Prof Adnan Khan, Chief Economist and Director for Economics and Evaluation Directorate of the FCDO, said, “Although Bangladesh has made significant progress in areas such as GDP growth, poverty reduction, women’s participation in the workplace, but it has slowed in many fields amid the current economic reality.”

“The country is on the verge of graduating from the status of a least development country (LDC) in 2026 driven by a large domestic market, a demographic dividend, remittance flows, export of readymade garments and relatively stable microeconomic conditions,” he said.

“But the country will face a new set of challenges for the graduation.

Among the challenges, improvement of Tax-GDP ratio, export diversification, minimization of the risk in economic growth caused by climate change and attraction of foreign direct investment are major,” he said.

PRI Chairman Zaidi Sattar, Director General of the BIDS Dr Binayak Sen and CPD’s Research Fellow Dr Prof Mustafizur Rahman, among others, spoke on the occasion.