According to a recent study by the Center for Policy Dialogue (CPD), tax evasion in Bangladesh resulted in an estimated revenue loss of 2,26,236 crore taka in 2023. This was revealed during a briefing on corporate income tax reform in Bangladesh held at the CPD office on Monday (April 21).

The CPD report indicates that nearly 50% of the revenue loss can be attributed to corporate tax evasion, with the amount for 2023 alone estimated at approximately 1,13,118 crore taka.

The research found that the scale of tax evasion has been increasing over the years. From 2011 to 2023, the amount of lost revenue due to tax evasion has shown a steady rise. In 2012, the revenue loss was recorded at 96,503 crore taka, and by 2015, it had escalated to 1,33,673 crore taka.

The CPD’s study highlighted several factors behind the rising tax gap in the country, including high tax rates, administrative weaknesses, a complex legal framework, and widespread corruption within the tax management system.

In the briefing, CPD’s Research Director, Khondaker Golam Moazzem, discussed the findings, with the main report being presented by CPD’s Senior Research Associate, Tamim Ahmed. Moazzem stressed that the current tax evasion situation poses a significant challenge for Bangladesh, especially as the country is in the process of graduating from the Least Developed Country (LDC) status.

The CPD also noted that once Bangladesh graduates from the LDC list, it is expected to see increased foreign investment from multinational companies. However, this could potentially raise the risks of tax evasion and avoidance, further complicating the country's fiscal landscape.

To address these challenges, the CPD has recommended institutional capacity building, the development of a digital tax infrastructure, and comprehensive policy reforms. Moazzem also highlighted that apart from tax evasion, the government loses a considerable amount of revenue each year due to incentives and tax exemptions. These exemptions are often given under the guise of promoting investment in various sectors, but the CPD believes these tax breaks should be completely abolished. According to Moazzem, incentives or tax exemptions should not be the foundation for attracting investments.