The government has planned introducing e-return and preparing e-payment framework in the current FY25 under the $4.7 billion loan programme with the International Monetary Fund.
The submission of returns by individual taxpayers, businesspeople and business entities through online has been described by the government as its shift towards electronic tax administration to reduce human interface.
To the same objective, the government will prepare the e-payment framework to enhance the revenue collection by the National Board of Revenue responsible for generating around 88 per cent of the annual government income.
The national revenue board will, however, make the framework effective in FY27, starting with large corporations and individual taxpayers managed by its Large Taxpayer Unit.聽
The government has agreed to implement the time-bound plans under the current loan programme to enhance the tax-GDP ratio regarded one of the lowest in the world.
The international lender made the government鈥檚 stances regarding revenue generation public in its second review of the loan programme released in the past month.
The multilateral lender has already disbursed $2.3 billion under the loan programme since FY23 in the wake of foreign currency shortages putting pressure on the country鈥檚 balance of payment.
The Washington-based lender is scheduled to release the remaining $2.4 billion in four tranches by May 2026.
The government told the lender that it would approve a development project proposal, which would include e-return and e-payment framework, by end of the current FY25 for digital transformation of the entire income tax administration.
Low revenue collection has long been nagging the country鈥檚 capacity for investment in infrastructure and human resources to enhance sustainable economic development.聽
To address this, various reform measures were initiated and implemented in the last few decades, according to the Medium-term Macroeconomic Policy Statement from 2024鈥�25 to 2026鈥�27, issued by the Finance Division in June 2024.
It, however, appeared that further initiatives were required to improve the tax-GDP ratio, noted the policy statement.
The government was implementing various reform measures to improve revenue collection and raise the tax-GDP ratio to 10.0 per cent in the medium term, added the policy statement.
In February 2023, the International Monetary Fund, while approving the current loan programme, said that Bangladesh鈥檚 tax-to-GDP ratio was one of the lowest in the world, constraining critical spending.
Extensive exemptions, complicated tax codes, and weaknesses in revenue administration resulted in low tax productivity across all major taxes, added the lender.
It further said that the current loan programme envisaged tax revenue mobilisation efforts of additional 0.5 per cent of GDP annually in FY24 and FY25 and 0.7 per cent of GDP in FY26, contributing to higher social spending and public investment.
