New tax system to show sectorwise spending
Dr. Rashed Al Mahmud Titumir, adviser to the Ministry of Finance and Planning, said the government will introduce a new tax architecture from the next national budget that will issue receipts detailing how tax money is spent across sectors such as education, health, and social security.
Speaking as chief guest at a pre-budget roundtable titled “Transparency and Reform: Redefining the National Tax Architecture” held at CA Bhaban in Dhaka, he said citizens’ willingness to pay taxes is closely linked to their perception of public service delivery.
The event was jointly organised by the Institute of Chartered Accountants of Bangladesh (ICAB) and The Financial Express.
In his speech, Dr. Titumir stressed that the government’s reform strategy is built on two core principles-connection and disconnection-to strengthen trust in the tax system.
He explained that disconnection aims to reduce direct interaction between taxpayers and tax officials to minimize corruption, while connection focuses on making citizens aware of how their taxes are used.
“Social trust between the state and citizens must be established; otherwise, tax fraud and evasion will not decrease,” he said, adding that transparency in public expenditure is essential for rebuilding that trust.
The adviser noted that Bangladesh’s current tax-to-GDP ratio stands at 6.67 percent, describing it as one of the lowest globally.
He said this reflects a long-standing structural weakness in the fiscal system.
He also pointed to what he termed a culture of political patronage, arguing that entrenched cronyist forces have contributed to tax evasion and weakened the integrity of the tax system over time.
Dr. Titumir said the government’s strategy now prioritizes expanding the economy and improving internal resource mobilization rather than merely increasing tax rates.
He identified employment generation as a key driver of higher direct tax collection.
He said several structural reforms are underway, including the formation of three task forces for economic reform, efforts to integrate the informal sector into the formal economy, reopening of closed industries, and revisions to SME policies along with incentives for cottage industries.
Highlighting rural development initiatives, he said the “One Village, One Product” programme is expected to help formalize local production and broaden the tax base.
He also emphasized recognition of the ‘Orange Economy’ or creative economy, noting that sectors such as design, arts, gaming, and fashion will be supported to bring more contributors into the formal tax system.
The adviser underscored the importance of coordination between fiscal and monetary policies and reiterated the need for central bank independence.
He said Bangladesh Bank is working on refinancing schemes and credit support mechanisms to revive closed industries and stimulate economic growth.
The roundtable included participation from leading business figures and policy experts, who called for a simplified tax structure and reduced bureaucratic complexity to encourage compliance.
Among the speakers were representatives from the Bangladesh Textile Mills Association (BTMA), Metropolitan Chamber of Commerce and Industry (MCCI), American Chamber of Commerce in Bangladesh (AmCham), ICAB, and The Financial Express.
