Speakers at a discussion emphasised increasing direct income tax to reduce increasing inequality in the taxation system.
They came up with the remarks in a seminar titled 'Combating Inequality and Direct Application to Increase Revenue Income' organised jointly by Policy Integration for Development (RAPID) and Economic Reporters’ Forum (ERF) at the ERF auditorium in Dhaka on Saturday.
If all the taxable persons pay tax according to the income tax slab, it will be possible to achieve 3.1 per cent by increasing the current 1.0 per cent personal income tax as a proportion of GDP, they added.
For this, the number of registered taxpayers should be increased. At the same time, if tax exemptions are removed, it is possible to increase taxes by 2.0 per cent of GDP, they opined.
Rapid chairman Dr. Mohammad Abdur Razzaque presented a keynote paper on the topic, reports UNB.
He said Bangladesh's tax-GDP ratio is 9.0 per cent, which is the lowest in the world. The main reason for this is that there are very few direct tax.
It should increase. Currently indirect tax 65 per cent indirect and direct tax 35 per cent.
However, the initiative taken by the government to bring direct tax to 70 per cent and indirect tax to 30 per cent in the coming days is the right decision, Razzaq said.
He said the two problems in Bangladesh are growing inequality and low government spending as a share of GDP. The main reason for this is the lack of direct tax. Although the number of direct tax has increased more than before.
However, in terms of GDP ratio and quantity, it is much lower in almost all countries of the world, including India, Bhutan, Malaysia, the government's income is more than that of Bangladesh.
Although the poor people of the country pay the highest VAT in proportion to their income. And people with higher income pay the least VAT.
He suggested to introduce social insurance system, by which every person income will be counted and it will be easy collection tax.
Former NBR chairman Dr Nasir Uddin Ahmed, additional secretary of finance ministry Kabirul Ezdani Khan, professor development studies of DU and Executive Director, RAPID Dr. Abu Eusuf, among others, spoke in the seminar.