Bangladesh raises VAT to make tax-GDP ratio healthy

15 Jan '25

1 min read

Bangladesh raises VAT to make tax-GDP ratio healthy

Pic: Adobe Stock

Insights

Bangladesh is imposing a simplified 15-per cent VAT to ensure economic growth, the chief adviser's press secretary Shafiqul Alam announced recently.
The aim is to make the country's tax-GDP ratio—one of the lowest in the world—healthy.
The interim government is trying to cut public expenditure and raise taxes, he said, clarifying that the impact of the new taxes will be minimal on the people.

Bangladesh is imposing a simplified 15-per cent value-added tax (VAT) to ensure economic growth, the chief adviser's press secretary Shafiqul Alam announced recently. The aim is to make the country’s tax-gross domestic product (GDP) ratio—one of the lowest in the world—healthy.

If the tax-GDP ratio dwindles, it may become impossible to repay the country’s debt, he cautioned.

This ratio has been going down since 2021 and has reached such a level this fiscal that there is a revenue shortfall of about Taka 42,000 crore in the last five months, Alam said.

The interim government is trying to cut public expenditure, he was cited as saying by domestic media outlets.

The government has also decided to raise taxes, Alam said, clarifying that the impact of the new taxes will be minimal on the people.

The government is tracing siphoned-off money and bringing laundered money back to the country is a top priority, he noted.

Fibre2Fashion News Desk (DS)

More Textiles News - Bangladesh...