Published: April 21, 2025, 04:38 PM
Bangladesh lost an estimated Tk 226,236 crore in tax revenue in 2023 due to widespread tax evasion, with corporate tax dodging accounting for nearly half of the total losses, according to a new study by the Centre for Policy Dialogue (CPD). The think-tank revealed these findings at a briefing on corporate income tax reform, organized at its Dhaka office.
The study highlights a troubling rise in tax evasion over the past decade. In 2012, the estimated tax loss stood at Tk 96,503 crore, climbing to Tk 133,673 crore by 2015, and surging further to Tk 226,236 crore by 2023. The CPD attributes this persistent problem to a combination of factors, including high tax rates, weak enforcement capacity, a complex legal framework, and pervasive corruption within the tax administration.
The CPD report warns that such high levels of tax evasion not only deprive the government of crucial revenue but also undermine tax compliance by discouraging honest taxpayers and overburdening those who follow the law.
In light of Bangladesh’s upcoming graduation from Least Developed Country (LDC) status, the CPD urged authorities to prioritize institutional strengthening, digital infrastructure improvements, and comprehensive tax policy reforms to prevent further revenue leakage, especially as foreign investment inflows are expected to rise post-graduation.
The report also recommends aligning the country’s tax policies with global standards, including the global minimum corporate tax rate. It suggests gradually increasing the corporate income tax (CIT) rate for export-oriented industries — such as the ready-made garments (RMG) sector — from the current 12 percent to 15 percent, to match international commitments and ensure fair competition.
Overall, the CPD emphasized that addressing tax evasion is critical for ensuring fiscal stability, financing development priorities, and fostering a transparent, accountable economic environment in Bangladesh’s post-LDC future.
