Tax-to-GDP ratio to rise to 10pc: PM

Prime Minister Tarique Rahman has outlined a series of measures aimed at strengthening domestic revenue mobilisation, with the government targeting an increase in Bangladesh’s tax-to-GDP ratio to 10 per cent within the next five years and 15 per cent by 2035.

The plans were detailed in a written reply tabled in Parliament on Tuesday in response to a question from Munshiganj-1 MP Md Abdullah. The Prime Minister is currently visiting Moulvibazar.

The lawmaker sought information on government initiatives to improve Bangladesh’s tax-to-GDP ratio, which currently stands between 7.3 per cent and 8 per cent, considerably lower than that of several regional economies, including Nepal.

In his response, Tarique Rahman said the government has adopted a range of short-, medium- and long-term measures under the National Board of Revenue’s Medium and Long-Term Revenue Strategy (MLTRS) to broaden the tax base and improve revenue collection.

Among the key initiatives is the end-to-end digitalisation of the revenue administration system. The government is also expanding online tax deduction management, simplifying tax laws and procedures, and reducing unnecessary tax exemptions and tax holiday facilities.

The Prime Minister said efforts are underway to strengthen tax compliance through enhanced data analysis and risk assessment. Information collected from various institutions is being used to identify tax risks, while risk-based audits and investigations are being reinforced through the use of sector-specific indicators.

He added that the taxpayer database is being expanded and modernised to improve monitoring and compliance.

To support these efforts, the government has introduced artificial intelligence-based online taxpayer services and awareness programmes designed to encourage voluntary compliance with tax laws. At the same time, authorities are taking what the Prime Minister described as effective legal action against tax evasion.

Tarique Rahman also highlighted the formulation and implementation of the Tax Expenditure Policy and Management Framework 2026, aimed at reducing revenue losses arising from tax exemptions and concessions.

In addition, the government is seeking to enhance revenue collection through post-clearance audits, recovery of dues from pending cases, auctions, encashment of bank guarantees, settlement of outstanding bills and collection of deferred payments.

The Prime Minister said the National Tariff Policy 2023 is being implemented in phases alongside the Customs Strategic Plan 2024-2028 to strengthen customs administration and improve revenue performance.

“I hope implementing these plans will make it possible to raise the tax-GDP ratio to 10 per cent within five years,” he said in the written reply.

He added that further initiatives, including the implementation of the Strengthening Domestic Revenue Mobilisation Project and the rationalisation of tax exemptions, are expected to support the government’s longer-term goal of increasing the tax-to-GDP ratio to 15 per cent by 2035.

The government’s revenue strategy comes at a time when strengthening domestic resource mobilisation has become a key policy priority to support public spending, infrastructure development and long-term economic growth.