Bangladesh lost Tk 226,236cr for tax evasion in 2023: CPD

Bangladesh lost an estimated amount of Taka 226,236 crore in tax revenue in 2023 due to tax evasion and avoidance, according to a study.

Of this amount, it was estimated that around 50 percent was lost due to corporate tax evasion, reports BSS.

The estimated corporate tax evasion in 2023 amounted to roughly Taka 113,118 crore, the study said.

The Center for Policy Dialogue (CPD) unveiled the findings on Monday at a briefing on corporate income tax reform for graduating Bangladesh at its office in the capital.

The study unearthed a sharp rise in tax evasion since 2011, with estimates reaching Tk 96,503 crore in 2012.

Research Director of CPD Dr Khondaker Golam Moazzem unveiled the findings of the study at an event titled “Corporate Income Tax Reform for Graduating Bangladesh: The Justice Perspective” held at its office in the capital’s Dhanmondi area on Monday.

Researcher M Tamim Ahmed made the key-note presentation on the findings of the study jointly carried out by Christian Aid in Bangladesh and CPD.

The CPD identified several root causes behind Bangladesh’s persistent tax evasion problem, including high tax rates, weak enforcement, complex legal frameworks, and widespread corruption within the tax system.

The report said from a tax justice perspective, high levels of tax evasion undermine compliance by discouraging honest taxpayers and increasing the burden on those who comply with the law.

Speaking on the occasion, Dr Golam Moazzem said that apart from tax evasion, the government is also losing a huge amount of revenues due to incentives and tax exemptions.

“Various sector-wise tax exemptions are being provided citing investment and such practice should have to be stopped fully. Incentives or tax exemptions couldn’t be the base for making investments,” he said, alleging that the incentive structure of Bangladesh has been framed out of political considerations.

“We’ll have to come out from such structure,” he added.

The CPD Research Director said that the context of Bangladesh’s upcoming graduation from the Least Developed Country (LDC) status poses a challenge before the country while following the graduation, investments from the multinational companies would increase in the country.

“As a result, the risk for tax evasion and tax exemptions will increase,” he said, adding that the CPD has recommended for enhancing the institutional capacity to face such challenge side by side improving the digital tax structures in tax system and thus carrying out policy reforms.

The CPD also stressed the importance of aligning with global tax agreements and fostering cooperation with other countries to ensure a fair and transparent tax regime.